Why invest with usLeading global player in structurally attractive market
We are the world's leading high service distributor in large, growing and highly fragmented markets. With a clear and proven strategy, strong balance sheet and well-invested business model we are well-placed to take advantage of the long-term structural growth opportunity.
We estimate that the global market in which we operate is valued at around £30 billion and growing, driven by demand for electronics and maintenance products growing at more than twice GDP and just ahead of GDP respectively. Our success is based on taking market share from smaller competitors who cannot match our product range or our market leading customer service offering.
(1) Illustrative market shares
The five international high service distributors (including Electrocomponents) together have an estimated market share of around 15%. Therefore, the opportunity for long-term structural growth is considerable.
Electrocomponents has at its core a strategy based on five priorities which we see as the components of growth and foundations of our success. These priorities are:
- International growth. Over the last five
years our international business (more than 70% of revenues
and 60% of contribution) has achieved a CAGR of 6% and we are
7%-10% annual sales growth going forward.
- Electronics & Maintenance: a balanced customer offer. Electronics and Maintenance have complementary growth and returns characteristics, and the combination generates both sales synergies, from the cross-selling opportunities, and cost synergies, from leveraging the same infrastructure.
- An eCommerce-led approach. Our strategy embraces a multi-channel approach with eCommerce at the heart of it. Our eCommerce revenues now contribute 54% of Group revenues and are growing more than twice as fast as the Group. Our target is to grow eCommerce to around 70% of our business, as we believe it will be a key driver of further share gains from smaller competitors.
Revenue Growth (1)
Revenue Share (2)
(1) Adjusted for currency and trading days
(2) Average share in year
- Leveraging operating margins. Having an international operating structure allows us to take advantage of economies of scale and achieve significant operating leverage. In our largest market, the UK, we currently achieve a return on sales around 10% points higher than that of our international business. As the international business grows it will be able to deliver increasing operating leverage and close this gap to the UK's return on sales.
- Maintain UK profitability. Our strategy is built upon a highly-profitable UK business that is delivering sustainable growth as it leverages the Group offer, successfully develops new incremental revenue streams and effectively manages both margin and cost.
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