Introduction
The Premier Farnell Group consists of two divisions: the Marketing and Distribution Division (MDD) and the Industrial Products Division (IPD).
The MDD is comprised of four businesses involved in the distribution of a wide range of electronic components and equipment and maintenance, repair and operations (MRO) products into commercial, industrial and public sector markets throughout Europe, North America and Asia Pacific. Together they represented 90.1% of sales and 85.1% of operating profit in the year, based on continuing operations and before head office costs.
Within these markets, the MDD businesses serve the varying needs of Electronic Design Engineers (EDEs), small scale production units, procurement specialists and maintenance and repair engineers. In aggregate, the MDD businesses have over two million customer contacts that are attracted by a common need for a broad product range, rapid and reliable delivery and specialist value-adding services. They place many small orders, with average order values of approximately £220 in North America and £100 in Europe and Asia Pacific.
The division stocks in excess of 400,000 different products sourced from a large number of suppliers and provides customers with access to a further four million products.
The Group’s growth strategy is largely directed to this division. Through a dedicated plan to increase the proportion of sales made to EDEs, via the web, and through internationalisation, the Company is targeting sales growth of between 6% and 8% per year.
The Industrial Products Division (IPD) comprises businesses supplying high-performance products to specialist industrial markets, predominantly in North America. The division accounted for 9.9% of sales and 14.9% of operating profit in the year, based on continuing operations and before head office costs.
The following sections cover only the MDD businesses on the basis that this division represented 90.1% of sales. The IPD businesses are covered in the relevant section of the Review of Operations.