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1 Corporate Express - Press Conference 09h30 CET Amsterdam, 1 October 2007 - Focus. Execute. Deliver. Strategic Review - Focus. Execute. Deliver.

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Presentation on theme: "1 Corporate Express - Press Conference 09h30 CET Amsterdam, 1 October 2007 - Focus. Execute. Deliver. Strategic Review - Focus. Execute. Deliver."— Presentation transcript:

1 1 Corporate Express - Press Conference 09h30 CET Amsterdam, 1 October 2007 - Focus. Execute. Deliver. Strategic Review - Focus. Execute. Deliver.

2 2 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 “Safe Harbour” Statement under the Private Securities Litigation Reform Act of 1995 Statements included in this press release, which are not historical facts are forward-looking statements made pursuant to the safe harbour provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Such forward-looking statements are made based upon management’s expectations and beliefs concerning future events impacting Corporate Express and therefore involve a number of uncertainties and risks, including, but not limited to industry conditions, changes in product supply, pricing and customer demand, competition, risks in integrating new businesses, currency fluctuations, and the other risks described from time to time in the Company’s filings with the US Securities and Exchange Commission, including the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 9, 2007. As a result, the actual results of operations or financial conditions of the Company could differ materially from those expressed or implied in such forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update publicly or revise any forward-looking statements.

3 3 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Agenda for today Introduction Strategy assessment Key strategic priorities Transforming the company Closing remarks

4 4 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Strategic Review process Reshaping business portfolio Broaden product portfolio of businesses Strategic review 1999-2003March-September 20072004-2007 Increased focus on office products Adding categories to create single source offer Shift organisation to category focus Focus on mid­market Private brands, preferred supplier, global sourcing Key strategic moves Key strategic moves Sold IT and Paper Merchanting businesses Acquired office products business - Corporate Express - SAMAS OP - USOP OP Acquisitions in Australia, Scandinavia, North America, Spain Divested ASAP Software and Veenman Germany M&A activity Detailed assessment together with external advisors, including Deutsche Bank and JPMorgan: 1.Do we have a sound strategy? 2.How can we improve performance? 3.What operational changes are needed to deliver? 4.Which strategic options do we have? IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

5 5 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Which strategic options do we have? Sale Break-up Merger Stand-alone We have considered a wide range of options We concluded that the stand- alone scenario is in the best interest of our shareholders and other stakeholders Based on the strategic review’s conclusions, we today announce a series of strategic initiatives and management and organisational changes to create value and growth as a stand-alone global player IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

6 6 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Key issues Corporate Express has the right strategy and is well positioned but has been lacking in execution… …we should further increase FOCUS and improve how we EXECUTE our plans... …we need to change our organisation and leadership to be able to unlock full potential and DELIVER shareholder value 1.Do we have a sound strategy? 2.How can we improve performance? 3.What operational changes are needed to deliver? Key questions Key issues IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

7 7 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Changes in Board composition CEO Executive Board Frans Koffrie has stepped down with immediate effect Peter Ventress new CEO Chairman Supervisory Board Paul van den Hoek decided to step down at the end of today – Previously scheduled to step down at AGM in April 2008 Frank Meysman to succeed – Supervisory board member as of 2006 IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

8 8 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 New leadership - Peter Ventress (1960) Appointed as new CEO, effective immediately Joined Corporate Express in 1999 1999-2000 President Corporate Express France Image SAS 2001-2002 Regional president Corporate Express Europe 2002 - 2005 President of Corporate Express Canada and member of North America management team – Realised sales growth of +16% and EBITDA growth of +50% 2005 - September 2007 President Corporate Express Europe – Excluding ATG sales growth of +9% and EBITDA tripled (based on 4 quarter rolling) – ATG acquired in September 2006 Member of the Executive Board since 2007 IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

9 9 FOCUS. EXECUTE. DELIVER. INTRODUCTION

10 10 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Overview Corporate Express Pure-play contract supplier within office products industry Leading global player Extensive logistical backbone Sophisticated eCommerce platforms Strong brands Over 18,000 employees 1 Last 4 quarters, excluding ASAP Software Global footprint Annual revenues of EUR 5.6 billion 1 #1 position in US, Australia, Norway, Sweden, Benelux and Germany Top 3 position in Canada, Austria, New Zealand, Ireland and Italy Present at over 300 locations in 20 countries in Europe, North America and Australia Company description IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

11 11 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 H1 2007 performance as reported Sales up 2.4% to EUR 3,194 million – 7.0% at constant rates Organic growth Corporate Express +3% – Office Products North America down 2% – Office products industry US facing challenging environment – US operations stable after disruptions in sales force and customer service OP Europe and OP Australia showing good performance Printing systems reporting a good first half Operating result EUR 108 mln – (4.2%), at constant rates flat Operating result before special items EUR 119 mln – (16.7%), at constant rates (13%)

12 12 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Trading update Q3 2007 results Q3 2007 to be published Tuesday 6 November CEUS organisation stabilised; enhanced morale ‘Simplify and Sell’ approach paying off Continue to gain market share Office Products North America Organic growth (1%) Q2 2007 (3%) Q1 2007 (1%) Office Products Europe Organic growth +7% Q2 2007+5% Q1 2007+6% Organic growth Q3 2007 IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

13 13 FOCUS. EXECUTE. DELIVER. STRATEGY ASSESSMENT

14 14 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Key actions to deliver shareholder value Launch 4 key strategic priorities to deliver profitable growth – Increase share of wallet – Improve category offering – Grow mid-market share – Strengthen geographic footprint Focus Execute Transform into a more operationally focussed and sales driven organisation Creation of one global management team to improve operational execution significantly Clear and specific targets, KPI’s and accountability Deliver Global Office Products: Average annual organic sales growth of at least 6% for 2008-2010 Given business model, EBITDA margin of at least 7% IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

15 15 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Strategic direction 2007-2010 Broaden product portfolio of businesses Focus. Execute. Deliver. 2004-20072007-2010March-September 2007 Adding categories to create single source offer Shift organisation to category focus Focus on mid­market Private brands, preferred supplier, global sourcing Key strategic moves Key strategic moves Acquisitions in Australia, Scandinavia, North America, Spain Divested ASAP Software and Veenman Germany M&A activity 1.Do we have a sound strategy? 2.How can we improve performance? 3.What operational changes are needed to deliver? 4.Which strategic options do we have? IntroductionTransforming the companykey strategic prioritiesStrategy assessment Strategic Review Increase share of wallet Improve category offering Grow mid-market share One global management team KPI’s, accountability Strengthen geographic footprint Closing remarks

16 16 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 IntroductionTransforming the company A leading player … Strong competitive position Pure-play contract OP supplier with distinct B2B model Large global footprint Scale benefits - Merchandising, sourcing Exchange best practices - Private brands, product range extension, Pick-to-Voice, eCommerce, Saleforce.com Scalable platform - Logistics and distribution infrastructure - Sophisticated eCommerce platforms Leading B2B market positions in key markets - #1 in US, Australia, Norway, Sweden, Benelux and Germany - Top 3 positions in Canada, Ireland, Austria, New Zealand and Italy Present at over 300 locations in 20 countries in Europe, North America and Australia Alliances in Europe, Latin America and South- East Asia Only player able to service customers globally - Strong sales growth with global accounts key strategic prioritiesStrategy assessmentClosing remarks

17 17 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 IntroductionTransforming the company … in an attractive market… High barriers to entry – Different infrastructures (IT, logistics) – Sourcing, multiple suppliers Operational leverage of fixed cost base Attractive Return on Capital Employed Attractive market Close link with white-collar employment Leverage of distribution, IT, eCommerce and sales force infrastructure Little risk of disintermediation key strategic prioritiesStrategy assessmentClosing remarks

18 18 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 …with continued focus on Office Products… The group has been streamlining and focussing the business Recent disposals ASAP Software, USA (Aug-07) Veenman, Germany (Sep-07) Reselling of desktop software, USD 992 mln in revenues Selling and servicing non-impact printing equipment, EUR 36mln in revenues Recent acquisitions Davenport, Canada (Aug-07) Educational Experience, Australia (Oct-06) ATG, Norway, Sweden, Denmark (Sep-06) Coastwide Laboratories, USA (May-06) Ofiexpress, Spain (Jan-06) Office Supply and Furniture distribution, CAD 71mln in revenues Educational supplies Office Products distribution, EUR 300 mln in revenues Facilities distribution, USD 45 mln in revenues Office Products distribution, EUR 13 mln in revenues IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

19 19 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 …and a streamlined operational infrastructure… IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

20 20 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 …but with room to drastically improve execution Decentralised organisation and unfocused go-to-market models …leading to unsuccessful execution and poor sales performance …however, with successful sourcing, merchandising, logistics and eCommerce Identified challenges – Under-utilized position with larger clients – Limited penetration in mid-market – Increasing complexity in category offering – Sub scale or absent in some geographies IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

21 21 FOCUS. EXECUTE. DELIVER. KEY STRATEGIC PRIORITIES

22 22 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 4 key strategic priorities  Increase share of wallet  Grow mid-market share  Improve category offering  Strengthen geographic footprint IntroductionTransforming the companyKey strategic prioritiesStrategy assessmentClosing remarks

23 23 FOCUS. EXECUTE. DELIVER. TRANSFORMING THE COMPANY

24 24 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 To become a fully operational driven company Peter Ventress (CEO): ”We have to transform radically our management structure and our ability to execute.” Decentralised structure no longer appropriate Organisation has to mirror our unique position as global pure play B2B office supplies company Transform into a more operationally focussed and sales driven organisation Creation of one global management team to improve operational execution significantly IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

25 25 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 “Quite simply, we have to be better at the basics” IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks Focus. On operations and sales driven culture Stronger focus on results, accountability and clearer measures Execute. We have to do significantly better than before Be closer to the business Clear and specific targets and key performance indicators (KPI’s) Deliver. Capitalising on our strong global position as pure-play B2B Average annual organic sales growth of at least 6% for 2008-2010 EBITDA margin of at least 7% It is all about Focus. Execute. Deliver.

26 26 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Peter Ventress (CEO) - 1960 Executive Management Group IntroductionTransforming the companykey strategic prioritiesStrategy assessment New management team Strong operational focus Jay Mutschler President USA Peter Damman President Europe Ron Lalla EVP Merchan- dising Not yet filled SVP People & Organisation Tim Beauchamp SVP Operations Dick Dijkstra SVP IT Grant Harrod President Australia Supervisory Board Executive Board George Dean - 1947 -To retire as planned after AGM in April 2008 Closing remarks Floris Waller (CFO) - 1958

27 27 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Enabling Corporate Express to deliver strategy Creation analytical performance culture Further strengthen HR organisation Close capability gap Share best practices Reassigning roles in management of sales and logistics Continue IT initiatives Strengthen individual accountability and improve performance Strengthen people, processes and capabilities to support strategy implementation Fill in short-term capability gaps Ensure strong talent base Improve cost efficiency of business Refocus its activity and resources towards sales Create a more integrated, effective IT backbone Additional performance initiatives Objective IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

28 28 FOCUS. EXECUTE. DELIVER. Closing remarks

29 29 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Key actions to deliver shareholder value Launch 4 key strategic priorities to deliver profitable growth – Increase share of wallet – Improve category offering – Grow mid-market share – Strengthen geographic footprint Focus Execute Transform into a more operationally focussed and sales driven organisation Creation of one global management team to improve operational execution significantly Clear and specific targets, KPI’s and accountability Deliver Global Office Products: Average annual organic sales growth of at least 6% for 2008-2010 Given business model, EBITDA margin of at least 7% IntroductionTransforming the companykey strategic prioritiesStrategy assessmentClosing remarks

30 30. FOCUS. EXECUTE. DELIVER.

31 31 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 IntroductionTransforming the companyKey strategic prioritiesStrategy assessment 4 strategic priorities to deliver profitable growth Adjust category offering Standardise category approach Full leverage private brands Capture customer value potential Continue logistics/supply chain initiatives Opportunity to attain leading positions Build selective beach heads Conduct fill-in M&A Refine, test and rollout mid market model Focused approach, increased accountability Key initiatives  Increase share of wallet  Improve category offering  Grow mid-market share  Strengthen geographic footprint Priority Identified challenges Share of wallet potential with clients Grow market share Too broad product offering in some countries Earn the right to expand offering Currently only 20% of sales Poor execution Too limited accountability Certain geographies subscale or absent Limited presence in emerging markets Opportunity % customers % wallet % customers % wallet % at customers % wallet # customers Closing remarks % wallet # customers

32 32 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007  “Increase share of wallet” Opportunity Key actions Further penetration of large and strategic accounts Increase number of large and strategic customers served Reduce sourcing and supply chain costs Focus on customer need Drive commercial excellence program –Improve go-to-market model and differentiate depth of sales approach –Create transparency on customer potential –Improve and intensify customer acquisition Initiatives to reduce supply chain costs already being rolled-out IntroductionTransforming the companyKey strategic prioritiesStrategy assessment % wallet % customers Closing remarks

33 33 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007  “Improve category offering” Opportunity Align a country’s offering with a cascading offering staircase – ‘Right to expand offering’ needs to be earned based on clear KPIs – When a country’s offering is broader than it should be, offering needs to become more focused – Categories should be managed in a coordinated way across CE – Fully leverage private brands programme Key actions Cross-sell selected extended categories Rationalise and standardise assortment Centralise sourcing Refocused and targeted marketing & sales approaches IntroductionTransforming the companyKey strategic prioritiesStrategy assessment Office supplies Paper Computer supplies Step 1: “Focus on the core” Step 2: “Cross-sell OP- related products” Step 3: “Selectively offer ‘indirects’ if attractive” 2a 2d 3g Basic facilities and Basic print and Basic catalog furniture and Basic Office Equipment hardware 3a 3b 3c 3d 3e 3f Extended facilities and/or Project furniture and/or Other hardware and/or Marketing print and/or PPE and work wear and/or Single source Services and/or Other product lines 2b 2c 1 % customers % wallet Closing remarks

34 34 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Opportunity Key actions Further exploit above–average gross margins and market growth of mid-market Reduce implementation issues around mid- market model roll-out Further increase sales and reduce costs to serve  “Grow mid-market share” Reinvigorate mid-market initiative in US – Increase contacts with high-potential prospects and inactives – Build out operational metrics dashboard – Monitor handoffs to identify where processes are broken Refine and roll out mid-market model in Europe – Refine mid-market model in Germany and apply “quick fixes” (where required) in other mid markets – Implement mid-market model in priority markets IntroductionTransforming the companyKey strategic prioritiesStrategy assessment % wallet # customers Closing remarks

35 35 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 Opportunity Key actions Attain leading positions across Europe Create viable growth options in high growth emerging markets Pursue opportunities in countries where currently present, but not in a leading position Focus on strong organic growth in countries where already in leading position  “Strengthen geographic footprint” Create beach heads in selected cities in emerging markets over time IntroductionTransforming the companyKey strategic prioritiesStrategy assessment % at customers % wallet # customers Closing remarks

36 36 FOCUS. EXECUTE. DELIVER. Corporate Express Strategic Review; FOCUS. EXECUTE. DELIVER. 1 October 2007 IntroductionTransforming the companyKey strategic prioritiesStrategy assessment Implementation underway, key milestones defined Sales excellence programme Phased roll-out (country by country) Country plansPhased roll-out (country by country) Quick wins in US Phased roll-out in US Category approach PilotsRoll-out 2009 2008 2007 2 Roadmap to roll out strategic priorities Increase share of wallet Improve category offering Continued implementation Continue logistics/supply chain initiatives Standardise category approach Readjust category offering Business cases Targeted M&A 4 Strengthen geographic footprint Conduct fill-in M&A Capture customer value potential 1 Continued efforts Grow market share Quick wins in Europe Phased roll-out in Europe Grow mid-market share 3 Closing remarks


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