StrategyOur business strategy is focused on five core areas
Leverage our global infrastructure and increase operating margins
We deliver around 550,000 products to 1.6 million customers globally from 17 international distribution centres across 32 countries. With distributors in a further 37 countries we provide our high service levels to around 90% of the world's GDP. The vast majority of our customers' orders are despatched the day they are received.
Having an international operating structure allows us
to take advantage of economies of scale and achieve
significant operating leverage.
| H1 FY11/12 £m |
Underlying Sales Growth |
% of Group Revenue | Contribution % of Revenue |
Market Position |
| Continental Europe | 15% | 36% | 21% | No. 1 |
| North America | 14% | 23% | 17% | No. 3 |
| Asia Pacific | 12% | 13% | 10% | No. 1 |
| International | 14% | 72% | 18% | No. 1 |
| UK | 5% | 28% | 29% | No. 1 |
| Group | 11% | 100% | 21% | No. 1 |
The UK market yields 29% contribution as a percentage of sales. Therefore, the opportunity as we grow sales is to extract these scale economies from our international operations, which currently achieve an 18% contribution level. Overall, the Group's operating costs as a percentage of sales have decreased by 5% points over the past five years increasing our operating leverage.
We can use improved scale as a springboard into new markets. For example, leveraging our European sales, marketing and operational capability enabled us to recently launch into Eastern Europe and Switzerland.