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Preliminary Statement for year ended 31 March 2013

23.05.2013

Electrocomponents plc, the world's leading high service distributor of electronics and maintenance products, today announces its results for the year ended 31 March 2013.
 

SUMMARY OF RESULTS

       2013      2012      Change
Sales      £1,235.6m      £1,267.4m      0.5% (1)
Headline profit before tax (2)      £98.7m      £122.3m      (19.3)%
Reported profit before tax      £91.3m      £122.3m      (25.3)%
Headline earnings per share (2)      15.7p      19.5p      (19.5)%
Headline free cash flow (2)      £56.1m      £52.7m      6.5%
Dividend per share (3)      11.75p      11.75p      -

(1) Sales growth, unless otherwise stated, is adjusted for trading days and currency movements ("underlying sales growth/decline"). Fewer trading days and currency movements reduced Group reported sales in 2013 by around £38m
(2) Headline measures of profitability and cash flow are defined as the relevant reported profit/cash flow measure before reorganisation costs/cash flows
(3) 2013: includes 5p interim and 6.75p proposed final dividend

Financial Highlights

  • 1% Group underlying sales growth, with 3% maintenance growth and 2% electronics decline
  • UK sales grew by 4%, benefitting from Raspberry Pi** sales, International sales declined by 1%
  • Headline profit before tax (2) declined by 19%, with 8% due to fewer trading days and currency
  • Gross margin declined by 0.8% points, operating costs (2) grew by 2% at constant currency
  • Second-half performance improved versus the first half, due to gross margin and cost actions
  • Headline free cash flow grew by 6% to £56.1m, with improved working capital and lower capex
  • Maintained full-year proposed dividend of 11.75 pence per share

Operational highlights

  • Continued investment in breadth and depth of offer, with over 70,000 new product introductions
  • Group eCommerce sales growth of 4%, with Group eCommerce sales share of 56%
  • Commenced installation of common IT system across Asia Pacific, successful go-live in Australia

Strategy update

  • New global organisation structure implemented, delivered £7m of annualised cost efficiencies
  • Evolved to common global strategy, comprising seven strategic priorities
  • New performance framework, targeting improved financial performance over the medium term
  • Driven by faster International share gains, UK growth and further operating leverage

CURRENT TRADING AND OUTLOOK

In the first seven weeks of the new financial year, the Group has delivered sales growth of 1%. The International business grew by 1% and the UK was flat. Within International, Continental Europe grew by 2%, North America grew by 1% and Asia Pacific declined by 1%.

Whilst mindful of challenging economic conditions, we are implementing our common global strategy and expect to make progress towards our medium-term performance goals. The Group is well placed to capture market share in its international markets and we are therefore increasing investment in our strategic initiatives.
 

IAN MASON, GROUP CHIEF EXECUTIVE, COMMENTED:

"The Group has reported results for the year in line with expectations. Underlying sales grew by 1% whilst headline profit before tax declined in challenging markets. However our initiatives to increase operating margins led to a significant improvement in financial performance in the second half.

This has been a year of significant change for the Group. We have successfully implemented a new global operating model and set a common global strategy. These developments, supported by additional investment, will enable us to increase the rate at which we gain market share and improve profitability over the medium term."
 

Enquiries:

Ian Mason, Group Chief Executive Electrocomponents plc 020 7567 8000*
Simon Boddie, Group Finance Director Electrocomponents plc 020 7567 8000*
Matt Jones, Head of Investor Relations & Corporate PR Electrocomponents plc 07717 544 124
David Allchurch / Martin Robinson Tulchan Communications 020 7353 4200

* Available to 15:00 on 23 May 2013, thereafter 01865 204000

The results and presentation to analysts are published on the corporate web site at www.electrocomponents.com 

Footnotes:
** Sales of Raspberry Pi globally are principally recorded in the UK. Raspberry Pi is a low-cost, credit card-sized single-board computer designed and developed by the Raspberry Pi Foundation, a charity established to promote computer development skills in education across the world.

Notes on financial terms:
In order to reflect underlying business performance, comparisons of sales between periods (including by region, product group and channel) have been adjusted for currency and trading days (underlying sales growth).

Changes in profit, cash flow, debt and share related measures such as earnings per share are, unless otherwise stated, at reported exchange rates.

Sign conventions: % changes in sales and costs are disclosed as positive if improving profit and negative if reducing profit.

Key performance measures such as return on sales and EBITDA use headline profit figures.

Notes to editors:
Electrocomponents is the world's leading high service distributor of electronics and maintenance products. With operations in 32 countries, we offer more than 550,000 products through the internet, catalogues and at trade counters to over one million customers, shipping around 44,000 parcels a day. Our products, sourced from 2,500 leading suppliers, include electronics, automation and control, test and measurement, electrical and support.

The business satisfies the small quantity needs of its customers who are typically electronics or maintenance engineers in business. A large number of high quality goods are stocked, which are dispatched the same day that the order is received.  The average customer order value is around £140 although the range of order values is wide. The Group's large number of customers comes from a wide range of industry sectors with diverse product demands.

Preliminary results 2013

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No.1

International high-service distributor

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32

Countries where we operate        

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62%

Share of total revenue generated by eCommerce

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500,000+

Products in our range

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1 million+

Customers in more than 80 countries

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2,500+

Major suppliers worldwide

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10.5%

Improvement in CO2 emissions efficiency

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6,000

Employees around the world

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