GLOBAL STRATEGY: SYSTEMS ENABLING GROWTH. November 2013

Transcription

1 GLOBAL STRATEGY: SYSTEMS ENABLING GROWTH November 2013

2 Agenda Introduction Systems are key to our success Systems implications of our strategy Summary Q&A

3 Common global strategy 7 strategic priorities, integrated business plan 3

4 Medium-term performance framework Key Performance Indicator Historic Performance (1) Medium-term Target Group sales growth (2) 4% pa (3) 5% - 8% pa (4) Group return on sales (5) 7% - 10% (6) 9% - 11% Return on capital employed (5) (7) 15% - 25% 20% - 30% Free cash flow as % of sales (5) 3% - 8% 4% - 6% (1) Performance between 2006 and 2013 (2) Underlying sales growth, adjusted for trading days and currency movements (3) Includes historic market growth of 2.5% (4) Includes estimated market growth of 3.5% (5) These are headline measures of profitability and cash flow which are defined as the relevant reported profit / cash flow before reorganisation costs / cash flows (6) Historical reported operating margin adjusted to reflect 75:25 International:UK sales mix (7) Operating profit as a percentage of net assets (including goodwill) plus net debt Targeting improved medium-term financial performance 4

5 Increasing investment in strategic initiatives Capital expenditure investment m Historic average run-rate 25m pa Target average run-rate 40m pa Funded by existing cash flows 5 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 Majority of investment will be on systems 5

6 Agenda Introduction Systems are key to our success Systems implications of our strategy Summary Q&A

7 Phil Cook Global IT Director 35 years IT experience 3.5 years at Electrocomponents Previously Shell, Honda, BAT (Group CIO) 20 years SAP experience 130 SAP implementations (as CIO) across the world Global operating model experience Based in Singapore Extensive international systems experience 7

8 Introduction Systems are critical to our business We have almost completed the roll-out of a world-class global platform Our investment to date has already delivered significant benefits Global strategy requires us to address tension between change and stability Our key strategic growth initiatives require significant systems investment Systems investment will enable delivery of growth ambitions 8

9 Systems are critical to our business 500m Transactions pa 2,500 Major Suppliers 57% e Commerce 800K Catalogues 5,600 Users 500,000 Products > 1m Customers 50+ Critical Systems 44,000 Parcels Daily Manage 50m Prices A high-transaction, data-intensive business 9

10 Large, global organisation capability Outsourced Commodity Services Transactional activity outsourced Intellectual property preserved in centralised team GLOBAL IT FUNCTION 230 full-time equivalents (FTEs), mainly in the UK with local support 60m of operating cost (in Process costs) Local Market Support Great team in place delivering world class IT systems 10

11 Our systems reliability is world class Investment has enabled growth and driven significant reductions in incidents 11

12 Global IT platform almost complete Allied Systems Platform SAP implementation Disaster Recovery WIP RS Systems Platform SAP UK/EU upgrade Data Centre move Full DR test ANZ roll-out SEA roll-out Greater China roll-out Japan roll-out Q4 FY14 FY15 Robust and stable systems platform 12

13 Reported sales ( m) Systems have already delivered significant benefits European regionalisation ecommerce Growth Enabled step-change in Europe sales growth 4% (1) CAGR FY05 - FY09 Regionalisation implemented 10% (1) CAGR FY10 - FY13 60% 50% 40% 30% FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 20% 10% 0% FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 H1 FY14 Group ecommerce share (1) Constant currency sales CAGR Europe sales CAGR moved from 4% to 10% post regionalisation Stock turn improved from 2.5x to 2.8x post SAP system implementation Productivity improvements delivered: e.g. France sales per head increase of 25% over last 10 years Group ecommerce sales share increased from 25% in FY06 to 57% in H1 FY14 ecommerce sales have grown 4x Group sales Enabled us to extend our competitive advantages 13

14 Agenda Introduction Systems are key to our success Systems implications of our strategy Summary Q&A

15 IT is central to the delivery of the Group strategy One global offer ecommerce with a human touch Value for money Global range Lifecycle management Global pricing strategy Global inventory management Digital marketing Value for money communication Offer Presentation ecommerce functionality Dynamic pricing Search Sandpit Business insight World class systems and supply chain SAP HANA SAP APAC Self-service reporting Enterprise Architecture Environments and Testing Systems at heart of Group s strategic initiatives 15

16 Continuing to evolve our systems template Forces for change Continued ecommerce growth and development Greater pace and agility required from IT systems Greater automation of processes required Enterprise Architecture Multi-channel Front Office Fast pace of change Customer, product and price data consolidated into a Middle Office Back Office transactional Systems of record Events and services managed securely Faster pace of change demanded by strategy 16

17 Target enterprise architecture Front Office Consistent experience irrespective of channel Fast pace of change Very high availability Highly personalized services Middle Office Key enabling services for the front office, e.g. customer and product data/content and prices Back Office Transactional Systems of record Pick, Pack, Ship, Bill Events, Services & Security Foundations of event-triggered activities Layers are secured & monitored against threats Demand for faster pace and volume of change creates a tension 17

18 ecommerce with a human touch DELIVERING AN EXCELLENT ecommerce-led MARKETING APPROACH Past Present Future Mainly traditional offline marketing Catalogue Direct mail Mainly online marketing Manual behaviouraldriven marketing Fully automated, rules-driven, online behavioural marketing ecommerce engine driving growth 18

19 Value for money ENABLING DYNAMIC PRICING & GLOBAL PRICING STRATEGY Past Present Future Biannual price changes via catalogue Each market managed own pricing strategy Now manage c.50million prices globally c.15million price changes per year Semi-manual process Dynamic, eventsbased automated price changes Capability to manage and change significantly more prices than today Better price perception, improved value 19

20 Business insight SAP HANA DRIVING MORE EFFECTIVE DECISION-MAKING Past Present Future Stock availability reports could take >1 day to run Sales reports could take >1 hour to run SAP HANA just gone live Reporting speed improved by up to 50x faster Automated realtime reporting available through self-service Advanced behavioural analytics Turning data into insight and understanding 20

21 The systems conveyor belt is working hard Just off the conveyor belt Next off the conveyor belt DesignSpark Mechanical Enhanced web search SAP HANA TE Connectivity range level-up Enterprise Architecture Enabling stage underway, due to finish in FY15 SAP APAC China in Q4 FY14 Japan in FY15 ecommerce search Search sandpit end FY14 Global IT is at the heart of the strategy 21

22 Agenda Introduction Systems are key to our success Systems implications of our strategy Summary Q&A

23 Summary Systems are critical to our business We have almost completed the roll-out of a world-class global platform Our investment to date has already delivered significant benefits Global strategy requires us to address tension between change and stability Our key strategic growth initiatives require significant systems investment Systems investment will enable delivery of growth ambitions 23

24 Agenda Introduction Systems are key to our success Systems implications of our strategy Summary Q&A