Wolseley Canada Inc
Our Business
We hold leading positions in many of the markets in which we operate. Our knowledge, coverage and scale enable us to operate efficiently and provide a high level of service to our customers.
The business that we are building today has the following key strengths:
Market leading positions
A large proportion of our businesses are market leaders in their local markets, and 83 per cent of the Group’s revenue is generated by businesses which are number 1 or 2 in their markets.
Servicing principally Repair, Maintenance and Improvement (“RMI”) markets
59 per cent of the Group’s revenue in 2013 was derived from RMI markets.
Substantial growth opportunities
1RMS = relative market share. Defined as Wolseley estimated
share in addressable market/share of largest competitor.
Market leading positions
A large proportion of our businesses are market leaders in their local markets, and 83 per cent of the Group’s revenue is generated by businesses which are number 1 or 2 in their markets.
Servicing principally Repair, Maintenance and Improvement (“RMI”) markets
59 per cent of the Group’s revenue in 2013 was derived from RMI markets.
Substantial growth opportunities
1RMS = relative market share. Defined as Wolseley estimated
share in addressable market/share of largest competitor.
*based on company estimates
Whilst many of our businesses are the number 1 or 2 players - their respective markets are reasonably fragmented. This provides significant opportunities to grow our businesses through a combination of organic expansion and acquisitions.
Organic growth opportunities arise from investment in new branch and showroom openings, additional sales people, new product segments including private label products, new customer segments and emerging channels such as B2B and B2C e-commerce sites.
We also invest selectively in acquisitions where we can generate synergies. These principally consist of in-fill transactions which complement existing business units in existing geographies.
Sustained gross margins
Our resilient gross margins have averaged between 27 per cent and 28 per cent over the last eight years despite changes in the economic environment.
Attractive returns on capital employed*
Wolseley achieved a return on capital employed in the year ended 31 July 2013 of 32.2 per cent.
* Return on capital employed is the ratio of trading profit to the average year-end aggregate of shareholders’ funds and adjusted net debt excluding goodwill and other acquired intangible assets.
Strong cash generation
Wolseley’s businesses utilise working capital carefully and convert profits strongly to cash.
2 Adjusted for receivables financing and year end working capital measures
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Relatively high return on sales
In the year ended 31 July 2013, Wolseley generated return on sales (trading profit) of 5.6 per cent for its ongoing businesses. During the previous economic cycle the ongoing businesses achieved a peak trading margin of 6.3 per cent in 2007.
Benefits of scale deliver strong returns
Scale in a particular market is important at both a local and a national level. Market leadership allows better leveraging of the total cost structure, as well as attracting better support and volume discounts from suppliers. Within Wolseley’s businesses there is a strong correlation between relative market share in a particular market and the returns achieved.
Strong balance sheet
Net debt at 31 July 2013 was £411 million and the Group aims to maintain the ratio of net debt to EBITDA within the range 1.0 to 2.0, consistent with an investment grade credit rating.
The reinstatement of the dividend in 2011 reflects the strength of the balance sheet and confidence in the future trading prospects. Our policy is to maintain and grow the dividend over time, taking into account the significant opportunities for investment in profitable organic growth and selected in-fill acquisitions. In 2013 the company rebased the Ordinary dividend to 66 pence, an increase of 10per cent. In addition on 1 October, given the strong financial position of the Group, the Board proposed a special dividend of £300 million.
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Focus on customer service and employee engagement
There is a strong correlation in our businesses between high levels of customer satisfaction and strong financial performance. We have introduced regular customer surveys in all businesses to establish a base point from which progress can be measured. Hand in hand with this is the need to ensure the right talent with relevant training, skills and competence in all our locations. Engaged employees deliver better customer service.
Significant group synergies
We seek to reduce overhead costs whilst maximising synergies that are available across the Group, including:
• Joint sourcing
• Private label development
• Shared IT infrastructure
• B2B e-commerce
• Performance and productivity management
• Category management
• Tax, treasury and insurance
Shared distribution centre facilities
Quality control, health & safety, and audit processes and procedures
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Source: http://www.wolseley.com/index.asp?pageid=258
