CONGRESS September 2013 Agenda 1. Introduction 2. Company - - PDF document

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CONGRESS September 2013 Agenda 1. Introduction 2. Company - - PDF document

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CONGRESS September 2013 Agenda 1. Introduction 2. Company Profile 3. 2013 H1 Results 4. Growth Strategy 5. Tools & Maintenance 1. Market Research 2. Opportunity 3. Customer Value Proposition Philippe Hervieux Joined

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SLIDE 1

CONGRESS – September 2013

Agenda

1. Introduction 2. Company Profile 3. 2013 H1 Results 4. Growth Strategy 5. Tools & Maintenance 1. Market Research 2. Opportunity 3. Customer Value Proposition

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SLIDE 2

Joined Brammer in 1992

  • Finance
  • Sales
  • General Management
  • Creation of the Tools & Maintenance division

Philippe Hervieux

Company Profile

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SLIDE 3

About Brammer

  • European market leader - with a

2% market share

  • Focused product range in

mechanical MRO components - a €40 billion + market

  • Bearings
  • Mechanical Power Transmission
  • Fluid Power
  • Tools and General Maintenance
  • Added value services

About Brammer

  • Leading the process of consolidation

in a highly fragmented market

  • Diverse customer base of over

100,000 customers

  • Customer risk is low
  • Largest European customer of our

main strategic suppliers

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SLIDE 4

Brammer footprint

  • Over 350 locations across 16 countries
  • 3,200+ employees
  • 3.5 million product lines
  • More than 100,000 customers
  • Robust fundamental growth drivers

2

2013 H1 Results

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SLIDE 5

2013 H1 Highlights (£m)

Total sales Operating profit Operating margin

Growth Track Record

2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2013 Total Revenue 270.8 287.4 314.3 379.6 478.4 426.1 468.4 571.5 639.6 328.4 GP % 30.1% 30.9% 30.5% 30.4% 30.0% 30.1% 30.1% 30.3% 30.5% 30.7% Operating profit 9.8 12.5 15.1 19.9 26.2 18.4 23.0 31.8 37.2 17.2 211.1 TP % 3.6% 4.4% 4.8% 5.2% 5.5% 4.3% 4.9% 5.6% 5.8% 5.2% Operating cash flow 18.7 15.7 11.9 16.7 29.2 33.3 27.5 28.9 28.6 13.1 223.6 Net Debt (€ equiv) 80.7 73.7 80.4 80.9 86.8 44.9 42.8 42.1 66.3 66.4 Total Customer Signed

  • ff Cost Savings

0.4 2.6 8.8 15.1 15.0 25.8 30.0 34.9 51.5 28.5 £m

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SLIDE 6

Sales per working day - Europe

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

Deseasonalized Brammer SPWD Index vs Seasonally Adjusted European Production Index (EU27 - 3 month moving average)

Brammer EPI

Sales per working day - Europe

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

Deseasonalized Brammer SPWD Index vs Seasonally Adjusted European Production Index (EU27 - 3 month moving average)

Brammer EPI

Since 2007:

  • European Production Index is down 10%
  • Brammer is up 51% (25% excluding Buck &

Hickman)

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SLIDE 7

Growth Strategy

Brammer – Growth Strategy

Growth Capability Costs Synergies Geographical development Key Accounts development Business Skills Development European Buying Systems Integration InsitesTM expansion Distributed Learning Programme Development IT and Other Cost Reductions Brand Development Product range extension Internal Communications and Involvement Capital Employed Management Supplier Relationship Management Country organic growth People Development Supplier Rationalisation Business Best Practice Bearings 12% share of €2bn market MPT 3% share of €5 bn market Fluid Power 1% share of €10 bn market Tools & General Maintenance 1% share of €25 bn market

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SLIDE 8

Key Accounts

Key Account Sales Performance Multi-site Status Scope Sales Growth Tier 1 EU contract Part EU Group €57.3m 12.5% €64.5m Tier 2 National contract Part EU Group €77.5m 3.7% €80.4m Tier 3 No contract Part EU Group €20.9m 12.5% €23.5m Tier 4 National contract National Group €42.5m 2.0% €43.3m €198.2m 6.8% €211.7m

2006 2007 2003 2008 2009 2010 2004 2005 2011 2012

  • No. of key

Accounts 50 40 30 20

2013 First ever EKAM Employed

Key Milestones & Investments

Investment in European KA Team Central support team established Account Development Managers Major Investments in KA infrastructure Focus on resilient sectors Sector Management established KA Tools established

Experience at scale

  • More than 500 people serving 54 Pan-EU

Key Accounts (June ’13)

  • Key Account support provided in 16

countries

Pan-European Supply Agreements

  • 14 Key Accounts are in

the Global Fortune 500 list — 1 of these in the top 100

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SLIDE 9

Update

  • Key Accounts SPWD grew by 7.8%
  • Now represents 53% of group sales
  • SPWD growth rates accelerating from

2.0% in January to 10.3% in June

  • 4 new pan-European contracts won
  • Pipeline is at record levels
  • Well positioned for double digit growth

in the second half

Case Study

  • Roll-out of successful Outsourced

Storeroom Management solutions in Iceland & Norway which delivered record savings in 2012 (> € 900k)

  • 65 staff deployed across 22 EU

production sites

  • H1 sales growth € 3.4m (46.1%)

Key Accounts Update

  • H1 Total 372 Insite™

– 133 full time; 239 part time

  • Increased by 45
  • Continued strong sales growth of 8.6%
  • H1 sales share Insite™ as 46% of total

KA business

  • Currently in direct negotiation with 65

customer locations

Case Study

  • Insite ™ from contract inception to

accelerate revenue transfer

  • Staff deployed across 11 EU

production sites – 7 full time; 4 part time

  • H1 sales growth €1.5m (448%)
  • H1 cost savings €192k

Insites™

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SLIDE 10

Update

  • Bearing SPWD declined 10.3%

reflecting market conditions

  • Key bearing suppliers report bottoming
  • ut of market
  • Non-bearing SPWD up 1.3% driven by

product range extension through Europe

  • Growth rates improving throughout H1

Case Study – Catalogue

  • 17,369 SKUs from 50 brands
  • 60,000 copies printed in 10 languages.
  • Annualised catalogue sales now >£6m
  • Centralised in-house team of 7

dedicated catalogue specialists

Product Extension

Mechanical Power Transmission –

Chains & Sprockets

Seals Tools & Maintenance Health and Safety Gearboxes Linear Motion -

Industrial Automation

Motors Bearings Fluid Power Mechanical Power Transmission -

Belts & Pulleys

Fluid Power

Product Extension

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SLIDE 11

Update

  • Turnover grew 5.0% overall, and

24.5% on the continent

  • Growth rate accelerating throughout

the first half

  • Successful rollout of European

catalogue to over 30,500 customers

Case Study

  • Tools & Maintenance sales to pan

European Tier 1 accounts up 34%

  • Successful range extension at major

European Accounts

  • PepsiCo Tools & Maintenance sales

up 9 times

European Product Division Update

  • Focus on defensive segments

continues

  • Utilities 13.6% and Food & Drink up

4.0%

  • Growth in other sectors, with

Consumer Goods up 43%

  • Market focus is increasing resilience

and is winning market share

Case Study

  • Segment specific marketing material

adds value to win sales

– Soft drinks – Baking – Brewing – Confectionary

  • Segmentation approach co-ordinated

with Key Account strategy

Market Segmentation

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SLIDE 12

Market Segmentation Continued investment in growth drivers

  • At constant currency, Sales, distribution and administrative costs

increased 2.8% to £83.6 million

  • Underlying operating costs are flat year on year, remaining tightly

controlled

  • Investment in excess of £1.8 million on growth driver projects

– Tools and General Maintenance – Key Alcoa contract implementation – Vending

  • Project teams co-ordinated centrally to maximise synergies and share

expertise

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SLIDE 13

Market Research

Spontaneous Word Association

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SLIDE 14

Product Usage And Purchasing Vs. 2012

Products Used Purchase From Brammer Bearings 89% 80% Belts & pulleys 77% 60% Seals 70% 44% Chains & sprockets 66% 47% Maintenance products 66% 30% Clutches & couplings 63% 39% Tools 61% 23% Pneumatics & Vacuum 59% 28% Hoses, tubes & ducting 57% 20% Hydraulics 54% 21% Motors 54% 17% Gearboxes 48% 15% Process products 47% 12% Health & Safety products 47% 8% Instrumentation 45% 13% Filtration products 40% 10% Control gear & switch gear 39% 12% Drives & starters 34% 7% Motion control 31% 7%

Key Drivers of Satisfaction

Product Offering Ordering & Customer Service Product Availability And Delivery Customer Sales Reps Technical Support Invoices And Payment Business Relationship

0.75

0.73

0.70

0.88

0.81

0.66

0.57

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SLIDE 15

When Is Brand Important? What Keeps You Awake At Night?

  • Improve Supply (29%)
  • Reliability of suppliers; Reduce the number of suppliers; Location of suppliers; Closer contact with

suppliers; On time and faster deliveries; More proactive suppliers;

  • Improve Equipment (12%)
  • Improved machinery; Better maintenance; More reliable equipment; More automation; Less

deterioration/depreciation; More standardised/uniform components.

  • Resolve Internal Issues (12%)
  • Delayer company hierarchy; Improve internal communications; More organisation; More structure;

Change company culture; Faster decision making; Engage more staff.

  • Price Issues (8%)
  • Stabilise prices; Better credit terms; Reduce costs of raw materials & labour.
  • Production Issues(8%)
  • Increase production capacity; Reduce lead time; Reduce operational costs.
  • Staffing (7%)
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SLIDE 16

Opportunity

Growth Objective - The Market Opportunity

> €40 bn

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SLIDE 17

Growth Objective - The Market Opportunity

Customer Value Proposition

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SLIDE 18

Selling Value

Products Services ( Products) Services (Processes) Solutions

Electronic Ordering / Invoicing Supplier Reduction Purchase Cards Energy Survey / Monitoring Product Transformation / Adaption Blanket Orders Training O.E. Parts Conversion Transaction Analysis Reporting Insite Services Substitute Parts Consolidated Invoicing Health & Safety PPE audit Self Billing Performance Measurement Delivery to Line Condition Monitoring 24/7/365 Service Equipment Surveys Technical Support Reduced Maintenance Training Repairs Technical Consultancy Insite Services Drive Design Component Kitting Application Advice Training Product & Brand Rationalisation Stock Profiling Consignment Stock Management Vendor Managed Inventory Insite Services Vending Services

And we do it through - What value do we deliver to you?

Reduce Total Acquisition Costs Brammer Product Portfolio Improve Production Efficiency Reduce Working Capital

Added Value – Procurement costs

Search & Select Order Pay E-commerce

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SLIDE 19

Added Value – Technical improvements

Product/Brand Rationalisation Product Specification Consumption analysis Bespoke PPE solutions

Added Value – Inventory Management

Vendor Managed Inventory Consignment Stock Inventory Profiling On-Site Solutions INVEND™

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SLIDE 20

Visit us online: www.brammer.biz View our latest Quick Tips video: www.brammertips.com

Bearings Linear Motion Seals Belts and Pulleys Chains and Sprockets Health and Safety Tools and Maintenance Gearboxes Motors Fluid Power

Mechanical Power Transmission –

Chains & Sprockets

Seals Tools & Maintenance

Brammer - Product Range Extension

Health and Safety Gearboxes Linear Motion -

Industrial Automation

Motors Bearings Fluid Power Mechanical Power Transmission -

Belts & Pulleys

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SLIDE 21