Electrocomponents : Preliminary statement for year ended 31 March 2015

Electrocomponents plc, the global distributor for engineers, today announces its results for the year ended 31 March 2015.

(1) Sales growth, unless otherwise stated, is adjusted for trading days and currency movements (underlying sales growth/decline). Fewer trading days and adverse currency movements decreased Group reported sales by £50 million
(2) Headline measures of profitability and cash flow are defined as the relevant reported profit/cash flow measure before pension credits and reorganisation costs/cash flows
(3) Fewer trading days and adverse currency movements decreased headline profit before tax by £8 million. Reported 2015 full-year headline profit before tax of £80.1m would be £5 million lower if translated at foreign exchange rates as at 15 May 2015

Overview
2015 financial performance was disappointing with investment not yet delivering the expected step-up in revenue growth and the UK business remaining in revenue decline. In April, Lindsley Ruth joined Electrocomponents as Group Chief Executive. In November, he will lay out his plans to deliver a sustained improvement in performance. Meanwhile actions to address underperformance are being intensified.

Financial highlights

• 3% Group underlying sales growth, with 6% International growth and 2% UK decline
• International driven by 10% growth in North America and 4% growth in both Europe and Asia Pacific
• UK contribution reduced by 8% (£9 million) due to revenue and gross margin declines
• Gross margin declined by 1.3% points, reflecting mix, negative FX and discounting
• Headline profit before tax(2) declined by 21%, with 8% (£8 million) due to fewer trading days and currency
• Reported profit before tax decreased by 5% benefiting from a £20 million pension credit
• Strong balance sheet with net debt: EBITDA of 1.3 times
• In August, the Group signed a new £172 million syndicated multicurrency facility
• Full-year dividend per share maintained at 11.75 pence

Operational highlights

• Group eCommerce sales growth of 6%, with share rising to 59% of Group revenues
• Extensive enhancements to our websites, particularly search and browse functionality
• Significant new product introduction, around 62,000 new products introduced to RS and 13,000 to Allied
• Good progress extending the Global Offer with 27% of products available globally (up from 10%)
• Successfully rolled out existing SAP-based IT system to Japan completing global rollout

Current trading
In the first seven weeks of the new financial year the Group has delivered sales growth of 4%. The International business grew by 6% and the UK declined by 2%. Within International, Continental Europe grew by 11%, North America grew by 4% and Asia Pacific declined by 1%. Sales growth in Continental Europe has continued to be strong while North American sales growth was affected by the recent weakening in US manufacturing output.

Peter Johnson, Chairman, commented:
"2015 financial performance was not good enough and something we are determined to improve. We are pleased to welcome Lindsley Ruth as our new Group Chief Executive and the Board will support him as he assesses what changes are needed to the strategy and its implementation in order to deliver a much improved performance going forward."

Lindsley Ruth, Group Chief Executive, commented:
"I was delighted to be appointed as Chief Executive of the Group. I believe strongly in the business model, but there remains much to do and these results demonstrate the challenges we face. We have strong brands, good geographical reach and market-leading positions. I have been impressed by the quality and attitude of the people within the business and I am excited about working with them to make the most of the significant potential within the business.

"My immediate focus is to reduce complexity, increase accountability and accelerate the pace of change to drive faster growth and improved shareholder returns."

Enquiries:

* Available to 12:00 on 21 May 2015, thereafter 01865 204000

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

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, the global distributor for engineers, has operations in 32 countries. We offer over 500,000 products through the internet, catalogues and at trade counters to over one million customers, shipping around 44,000 parcels a day. Our product categories, sourced from 2,500 leading suppliers, include semiconductors, interconnect, passives and electromechanical, automation and control, electrical, test and measurement, tools and consumables.

The business satisfies the small quantity needs of its customers who are typically electronics design engineers, machine and panel builders or maintenance engineers in business. A large number of high quality goods are stocked, which are despatched the same day that the order is received. The average customer order value is around £150 although the range of order values is wide. The Group's customers come from a wide range of industry sectors with diverse product demands.