Brammer Invend Presentation · 2016-11-22 · Additional (telesales, Installation, Helpdesk, Team...
Transcript of Brammer Invend Presentation · 2016-11-22 · Additional (telesales, Installation, Helpdesk, Team...
Brammer InvendTM
> Convenience & simplicity
> Reduce consumption
> Lower inventory costs
> Improve productivity
28th July 2015
Agenda
• What is Invend™?
• Benefits for Brammer’s customers
• Benefits for Brammer
• Progress to date
• Brammer Invend™ for Key Accounts
• Brammer Invend™ Infrastructure
• Financial model
• Brammer’s competitive advantage
2
What is Invend™?
What is Brammer Invend™?
A fully managed industrial vending service that reduces consumption of fast
moving industrial products, lowers inventory costs & improves productivity
Fully managed service:
We handle everything
from installation to re-
stocking
No up-front investment:
No need for the customer
to invest in machines &
software, he only pays for
the products used plus a
monthly software/data
management fee
Easy installation and
operation:
All the customer needs to
get started is an internet
connection and power
supply
Provides control over
usage and access:
Gives the customer real-
time visibility and control of
end user and cost centre
usage
4
We help the customer select the right lines from our
Invend™ product range and agree stock levels
We configure the machine to suit the chosen products
We deliver and install the machine
How It Works: Machine set-up and installation
01
02
03We show the customer how to set-up and manage end
users04
We help the customer to
select product lines & agree
stock levels then manage
machine delivery, installation
& training
5
End users enter their unique code using a keypad or
scanning a barcode label – if authorised, the required
product is dispensed
An automated process means we know when the stock
in the machine is running low
Our local branch restocks the machine & invoices for
the items the customer has used
How It Works: Restocking and reporting
01
02
03Invend™ provides the customer with a range of reports
to keep him in control of usage04
End users have convenient
and controlled access to
products whilst an
automated process allows
us to replenish items when
required
6
Brammer Invend™: Product choice
Invend™ can stock a broad range of fast moving industrial consumables:
over 30,000 certified vendable products
01
05
02
06
03
07
04
08
7
Invend™ Machine Overview
InvendTM Coil
Ideal for hand tools, cutting tools, abrasives, adhesives & PPE items such as gloves and safety glasses
> Manage up to 60 individual products
> Easy to use touch screen interface & bar code Scanner
> High levels of control over item issues
> Visibility of products through glass front
1
InvendTM Carousel
Ideal for a wide range of industrial consumables such as hand tools, cutting tools, abrasives, adhesives &
PPE such as gloves, glasses & ear protection
> Manage up to 560 individual products
> Flexibility to carry a wide range within small footprint
> Easy to use touch screen user interface
> High levels of control over item issues
2
InvendTM Locker
Suitable for large items or bulk issues of expendable items such as lubricants and boxed gloves
> Operates in combination with the InvendTM Coil or Carousel
> Manage up to 12 individual products
> Visibility of products through glass front
3
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Invend™ Technology
Ethernet
InvendTM
Server
Internet
InvendTM
Machine
Customer Firewall Firewall
Port 80 & 443
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Benefits for Brammer’s customers
Why Brammer Invend™?
Invend™
offers:
Reduced product
consumption. By controlling
the use of fast-moving
industrial consumables, a
customer can typically cut
spend by 25 to 40%
Reduced replenishment
costs and simplified
processes. We handle re-
stocking, saving the
customer money and
reducing wasted staff time
Health and Safety
Compliance. The
customer knows what
has been vended
when, and to whom.
Lower inventory costs, greater efficiency,
and improved productivity. The customer
only pays for the items he uses, removing the
need to carry the cost of inventory. Products are
available when and where the customer needs
them, allowing the customer’s staff to use time
productively, instead of visiting stores to restock
11
Who Benefits?
24/7 availability across the customer’s business
Production and
Maintenance
• Improves control and
availability of required
products
• Reduces wasted walk
and waiting time
associated with visits to
stores
Purchasing
• Reduces consumable
MRO usage by 25-40%
• Reduces suppliers and
total cost of ownership
• Improves usage
reporting by user and
cost centre
Health and Safety
• Only approved PPE
equipment is available
on the shop floor
• Audit trail of issued
health and safety items
Stores
• Saves wasted staff time
by removing the need to
order, replenish and
raise paper work for fast
moving MRO items
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Benefits for Customers
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Benefits for Brammer
Invend™ Direct and Indirect Growth
1. Invend™ generates DIRECT GROWTH
– Direct growth is the revenue generated through the machine
– Almost all of the business transacted through the machine is new business to
Brammer
– Mainly PPE and TGM: NOT cannibalising existing business
2. Invend™ generates INDIRECT GROWTH
– Through better customer engagement and visibility the customer sites with
Invend™ machines grow faster than the rest of the business
– Indirect growth is the additional revenue attributable to the Invend™ presence
at customer site outside of the vending machine
– Indirect growth is across ALL product ranges 15
Indirect Growth
• In selling Invend™ we have engaged with:
– Health and Safety Managers
– Purchasing Managers
– Production Managers
– Maintenance Managers
– Factory Managers
• Multiple critical customer collisions during pre-sales process
• Post-installation, Brammer is “front of mind” through:
– Invend™ machines are a very visible Brammer presence on the customer site
– Direct access to customer site for replenishers – we are a trusted part of the
customer’s supply chain
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Comparison of Product Mix – H1 2015 vs H1 2014 like for like sales across 317 sites
• We sell more of ALL product groups to customer sites with vending
machines
YTD JUNE DIRECT SALES MIX
TGM 85%
CHEMICALS 8%
OTHERS 7%
100%
YTD JUNE
2014 2015 GROWTH GROWTH % MIX
BEARINGS 1,550 1,849 299 19.3% 8.3%
LINEAR MOTION 310 326 16 5.1% 1.5%
POWER TRANSMISSION 3,823 3,884 60 1.6% 17.4%
FLUID POWER 4,424 4,945 521 11.8% 22.1%
CHEMICALS 685 998 313 45.8% 4.5%
FASTENERS 379 414 35 9.2% 1.8%
TGM 3,384 6,382 2,998 88.6% 28.5%
SEALS 962 1,102 139 14.5% 4.9%
SERVICES 438 600 163 37.1% 2.7%
OTHERS 1,223 1,865 643 52.6% 8.3%
17,178 22,366 5,188 30.2% 100.0%
INVEND CUSTOMER TOTAL SALES
All values in €000s17
Progress To Date
Cumulative Number of Machines Signed in Agreements
• Agreements have now been signed for 1,206 machines
0
200
400
600
800
1000
1200
1400Jan-1
3
Feb
-13
Ma
r-1
3
Apr-
13
Ma
y-1
3
Jun-1
3
Jul-1
3
Aug-1
3
Sep-1
3
Oct-
13
No
v-1
3
De
c-1
3
Jan-1
4
Feb
-14
Ma
r-1
4
Apr-
14
Ma
y-1
4
Jun-1
4
Jul-1
4
Aug-1
4
Sep-1
4
Oct-
14
No
v-1
4
De
c-1
4
Jan-1
5
Feb
-15
Ma
r-1
5
Apr-
15
Ma
y-1
5
Jun-1
5
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Updates – Quarter on Quarter
Q1 Q2 Q3 Q4
Machines Signed 2015 237 304
2014 111 97 110 188
2013 11 34 28 86
Q1 Q2 Q3 Q4
Machine Installations 2015 172 194
2014 65 104 105 135
2013 1 13 30 71
Q1 Q2 Q3 Q4
Machines Live 2015 658 845
2014 178 278 370 501
2013 1 14 44 115
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Updates – Quarter on Quarter
Q1 Q2 Q3 Q4
Total Account Sales 2015 10,370,694 11,995,246
for sites with vending machines 2014 3,092,425 4,756,445 6,708,560 8,237,585
2013 8,766 134,608 615,162 819,711
Q1 Q2 Q3 Q4
Invend Growth Rate 2015 37.2% 24.7%
2014 74.0% 47.5% 62.1% 48.4%
2013 - 243.2% 35.9% 106.5%
Q2 two days shorter than Q1
All values in €uros21
Invend™ Update - June
• Signed 136 machines in June
• Installed 74 machines in June
• Live machines 845
• Pipeline of 316 machines to install
• 117 people directly involved in InvendTM
YTD
• 541
• 366
Total
• 1,206
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Key Accounts vs Regional Accounts (2015 June YTD)
Regional Base Business Key Accounts
Number Customers 161 83
Number of sites 168 149
Number of Machines end Q2 378 439*
Number of machines end Q1 295 336*
Average Machines per site 2.3 3.0
H1 2015 a/c Growth 63% 24%
H1 Account Sales €4,595k €17,771k
*Excludes 28 machines at Alcoa in the Nordic region. Related sales numbers also excluded for consistency.
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Brammer Invend™ for Key Accounts
Invend™ and the Brammer Value Proposition
Reduce your total
acquisition costs
Improve your
production efficiency
Reduce your
working capital 01 02 03Reduced Consumption
Completely automated
process
Brammer has a unique cost savings program that helps you save money
All saving definitions and calculation methodologies are captured and agreed in a cost saving overview document
Three key focus areas
Walk and wait time saving
24/7/365 availability
Stock owned by
Brammer until
dispensing
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Invend™ saves costs for our customers
• 74 Cost Savings already logged
• 22 Cost Savings forms signed off by
customers for a total value of € 175 k
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Invend™ for Key Accounts
0
50
100
150
200
250
300
350
400
450
500
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
# MACHINES AT KEY ACCOUNTS • 83 customers
• 149 sites
• 439 machines live
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Quarterly Invend™ sales
0
100
200
300
400
500
600
700
800
2013Q1
2013Q2
2013Q3
2013Q4
2014Q1
2014Q2
2014Q3
2014Q4
2015Q1
2015Q2
QTR INVEND SALES • Current annual direct sales run
rate > € 3m
• Accelerating trend
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Some Customer References
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Rapid deployment within large European customers
• Nine Key Account customers already have InvendTM machines live in
more than one country
• Most advanced customer has 79 machines installed on 32 sites across 4
countries … and more to come!
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The Brammer Invend™ Infrastructure
Specialist Invend™ Team
• Total annualised spend of £6 million
• Our business development efficiency has increased consistently in each of the last 6
quarters – the number of staff has plateaued but the number of agreements per person per
month has increased significantly
• We have capacity in place to win 300 agreements per month, as efficiency continues to
improve
Resource summary
Dec
'13
Dec
'14
Jan
'15
Feb
'15
Mar
'15
Apr
'15
May
'15
June
'15
Nb Invend Attack Vans 10 21 21 21 21 21 21 21
INVEND MANAGER 5 11 11 11 11 11 11 11
INVEND SALES EXECUTIVES 15 26 26 24 23 21 19 20
PROPOSALS COORDINATOR 7 18 18 19 20.5 20.5 19.5 19.5
INSTALLATION COORDINATOR 3 8 10 10 10.5 10.5 10.5 10.5
DATA & PRICING/DEMAND COORDINATOR 1 5 5 5 5 5 5 5
SUPPORT/REPORTING 1 6 6 6 8 8 9 10
TOTAL FTE (excl Telesales) 32 74 76 75 78 76 74 76
Additional (telesales, Installation, Helpdesk, Team leaders) 8 32 32 32 31 31 31 32
Centre Team 8 10 10 10 10 9 9 9
TOTAL FTE 48 116 118 117 119 116 114 117
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Infrastructure
• 117 people
• 21 Invend™ Attack Vans
• Order book across 15 countries
• ‘Invend™ Certified’ Product Database –
30k+
• Fully integrated into ERPs
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Benefits for Brammer – the Financial Model
Total Sales to Invend™ Customer Sites
All values in €uros
• Solid growth and steady
margins, consistent with
Brammer’s average
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Invend™ Modelling – profitability per machine
Model Assumptions
• First full year annualised Direct Growth = €8k by year end
• First full year annualised Indirect Growth = €16k by year end
• Both Direct and Indirect Growth increase further over time
• Gross Profit similar to Brammer’s current average
• “Drop-through” after Incremental SDA = 10% Trading Profit
• Average machine cost = €8k
• ROCE = 30% per annum
• Machine life > 10 years
• Depreciation 7 years straight line
• Machine inventory turns > 12 times
• Funded from cash flow and existing facilities
These assumptions
have been proven
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Brammer’s Competitive Advantage and Barriers to Entry
Competitive Advantage
• Differentiator from our competitors
– “purchase your PPE and use the Invend™ Service for control”
• Customers with Invend™ are buying new product ranges from Brammer (TGM & PPE)
– No cannibalisation of existing Brammer business, even though customer consumption of vended items reduces
• “Machine behind the machine” is a differentiator. It is complex to consistently deploy 100s of machines across Europe
– Large investment – We have so far spent over £10 million of S,D&A solely on developing the vending concept
– Difficult for others to replicate
– 15 countries live (UK, IE, IS, NO, PL, ES, FR, BE, NL, DE, CZ, IT, CH, AT, PT)
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Barriers to Entry
• It is complex to deploy consistently
– Our “One Brammer” approach to Best Practice (Synergies) has come
into its own:
• Marketing
• Sales process
• Quotation process
• Machine configuration
• Machine installation
• IT infrastructure and Customer reporting
• Product development
• Replenishment process
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Economies of Scale – Brammer specific competitive advantage
• The “Machine behind the machine” - huge investment made
• Breadth and capability of the supply chain
– Inventory & Infrastructure - warehousing, branch network, purchasing
• Relationship with Suppliers – and bargaining power
– 27,000 suppliers – significant growth with TGM & PPE suppliers
• Access to existing customers
– Over 100,000 customer sites in 23 countries
– Only 200 customers and 317 customer sites have so far adopted vending
– 0.3% of customer sites, but these customers now represent 5% of revenues and
are our fastest growing group of customers
– Access to existing Key Accounts!! Sell once, win dozens of machines…..
– We become further embedded at the customer
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Barriers to Entry – Capital Requirements
• €8000 investment per machine
• Customer is charged a monthly software fee– The machine is free to the customer
• Returns are generated from direct and indirect sales growth
• Indirect growth is double direct growth
• To get indirect growth you need the full product range– PPE– TGM– Bearings– Mechanical/Electrical Power Transmission– Fluid Power
• Model does not work without full product range
41
The Machine behind the Machine…
Packaging
Local Sales
Force
Product Templates
Regional Build Centres
Support & Training
Local Branch Fulfilment42
Potential Upsides
• Product substitution with Brammer own-brand products will increase
margin significantly
– -
– -
• Faster development of PPE/TGM spend leading to better pricing and
rebates
• SDA efficiency improvements linked to machine density
43
Summary
Summary
• Invend™ is a great solution for customers
– Productivity, Availability, Consumption reduction, Compliance
• Invend™ is complementary to, and leverages our Key Account and TGM
growth drivers
• Invend™ delivers proven profitable growth for Brammer:
– Direct sales growth and Indirect sales growth, in a ratio of 1:2
• Customer sites with Invend™ are proven to grow faster than the rest of
the business
• The industrial vending market is an undeveloped channel to market,
represents a huge opportunity, and has high barriers to entry
• Brammer is Number One in Europe, and we will extend our lead
45
Questions
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