Internationalising our business model

Strategic goals for 2008

• Reorganise our Chinese business to focus on the rapidly growing EDE customer segment.
• Expand into India.
• Further penetrate emerging markets of Eastern Europe.
• Develop the EDE offering in the Americas to focus on this fast growing sector.

Achievements in 2008

• In April 2007, Premier Farnell launched Premier Electronics to meet the needs of electronic design engineers in China.
• Farnell India began operations on 31 January 2008, following an acquisition.
• Further penetration of Eastern Europe occurred with the launch of four local language websites.
• A new web front end, the addition of 138,000 products and a strengthening of our management team by experienced industry executives has improved our acquisition of electronic design engineers in the Americas.

Priorities for 2009

• Continue to strengthen our alignment with the needs of EDE customers in China, through new product and constantly improving their web experience.
• Support our operations in India and ensure that they have the requirements to provide high service solutions to the local engineering community.
• Evaluate growth opportunities in global markets with high growth potential, with a particular focus on Eastern Europe.
• Support our American based Industrial Products Division as it continues to expand internationally.

Through our local language catalogues and websites, knowledgeable employees in each of our markets, our multi-channel offering, and unique approach to business we ensure that the local market can access our global network of companies, seamlessly and without delay.

Emerging markets in Asia and Eastern Europe have provided us with a significant platform for profitable and sustained growth. These markets are experiencing an explosion in indigenous engineering design companies and there is increasing need for reliable products from a trustworthy service provider, in a timely manner. Our access to a vast array of products and our superior logistics, which includes next day delivery to cities all over the world has set us apart from our competition.

Unlike the manufacturing activity that has moved offshore, many of our large customers have kept their design and innovations teams within the mature markets of the UK, mainland Europe and North America. Although economic growth in these markets tends to be lower than in the emerging markets, there remains strong demand for electronic design engineers, providing a natural platform for our growth.

Design engineers are called upon to design better, stronger and smarter, and think carefully about the aesthetics and environmental impact of their products. As the market leader in RoHS compliant products, we are well positioned to grow our business through a targeted approach to the EDE customer segment.

Throughout the year Premier Farnell gained traction in many of its markets.

In China, we launched Premier Electronics and opened a new warehouse and distribution centre in order to focus on the needs of China’s local design engineers. Premier Electronics also secured a delivery contract to guarantee next day delivery to over 95 Chinese cities, launched a mandarin website and partnered with various suppliers in order to seed the market with new technologies for the EDE customer segment. With more than 20,000 stock keeping units (SKUs) stocked in Shanghai and another 140,000 products available from global distribution centres, Premier Electronics is setting a new service standard appreciated by our Chinese customers.

In India the Company acquired part of the trade and net assets of high-service distribution company Hynetic Electronics Private Limited (Hynetic). Our business began trading as Farnell India on 31 January 2008. Farnell India has eight branches from which to serve the local community and through Hynetic’s position as an authorised Farnell distributor, it had already earned our brand a well known reputation with the local community. Premier Farnell is excited to have this foothold in the region as its design capabilities continue to develop and grow.

In North America and Europe we have seen the businesses attract significant numbers of new EDE customers and they continue to drive business through the web. In this region many of our businesses have already achieved our initial target of 50% business via their websites.

Although much of our internationalisation is focused around the EDE customer segment, our Industrial Products Division continues to strengthen its reputation outside its home market in the US and our MRO business has seen increased demand in emerging markets due to the increase in infrastructure to support industrialisation.

Our global network of companies and distribution centres, combined with our local approach to conducting business, and local and knowledgeable employees, really does give Premier Farnell and its customers a unique value proposition from which to succeed.