GERMANOS GROUP OF COMPANIES April 2003 1. Business Segments Retain 26% 3.6% 4%-5% growth Strong...

GERMANOS GROUP OF COMPANIESGERMANOS GROUP OF COMPANIES

AprilApril 200 20033

1

Business Segments

Retain26%

3.6%

4%-5% growth

Strong growth in prepaid cards

30% mshare“Toshiba”WholesalWholesalee

Expand4.5%

7.4%Replacement cycle (3-5yr)

Oligopoly“Sunlight”IndustrialIndustrial

66%

89%

% of Sales% of Sales

% of Gross Profit% of Gross Profit

Cellular Penetration

Key DriversKey Drivers

Expand60% of net adds

65% Top of Mind awareness

“Germanos”

RetailRetail

Strategic Strategic DirectionDirectionPositionPositionBrandBrand

19801980FoundationFoundationFirst Germanos Outlet (Athens-Greece) selling batteries was First Germanos Outlet (Athens-Greece) selling batteries was founded.founded.

FoundationFoundationFirst Germanos Outlet (Athens-Greece) selling batteries was First Germanos Outlet (Athens-Greece) selling batteries was founded.founded.

19901990

19911991

The first franchise outlet was foundedThe first franchise outlet was foundedThe first franchise outlet was foundedThe first franchise outlet was founded

Sunlight factorySunlight factoryAcquisition of Factory producing batteries and autonomous energy Acquisition of Factory producing batteries and autonomous energy solutionssolutions

Sunlight factorySunlight factoryAcquisition of Factory producing batteries and autonomous energy Acquisition of Factory producing batteries and autonomous energy solutionssolutions

19941994Mobile TelephonyMobile TelephonyMobile Telephony in Greece. Germanos was among the first Mobile Telephony in Greece. Germanos was among the first retailers.retailers.

Mobile TelephonyMobile TelephonyMobile Telephony in Greece. Germanos was among the first Mobile Telephony in Greece. Germanos was among the first retailers.retailers.

19991999

20002000

International ExpansionInternational ExpansionRetail Activities started in 3 CountriesRetail Activities started in 3 CountriesInternational ExpansionInternational ExpansionRetail Activities started in 3 CountriesRetail Activities started in 3 Countries

I.P.O.I.P.O.I.P.O.I.P.O.

20012001 Expansion in PolandExpansion in PolandExpansion in PolandExpansion in Poland

1 Shop1 Shop

5050

100100

200200

450450

BulgariaBulgariaBulgariaBulgaria

RomaniaRomaniaRomaniaRomaniaCyprusCyprusCyprusCyprus

PolandPolandPolandPoland

GreeceGreeceGreeceGreece

History

20020022 Expansion in Expansion in FYR MacedoniaFYR MacedoniaExpansion in Expansion in FYR MacedoniaFYR Macedonia MacedoniaMacedoniaMacedoniaMacedonia

Historical Performance

SALES € mn

123

423

615

276

506.39

0

100

200

300

400

500

600

700

1998 1999 2000 2001 2002F

After Tax Profit € mn

5.6

14.2

29.2 29.5

32.8

0

5

10

15

20

25

30

35

1998 1999 2000 2001 2002F

Subscribers '000

537

222

1280

2700

2104

0

500

1000

1500

2000

2500

3000

1998 1999 2000 2001 2002F

EPS - Share Price

0.4

0.74 0.750.83

11.0011.04

20.01

27.88

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1999 2000 2001 2002

0

5

10

15

20

25

30

Other Achievements

Financial Times – 2001 ListFinancial Times – 2001 Listof top 500 European companies at delivering results of top 500 European companies at delivering results

POWER ONPOWER ON

Germanos Retail Network

Connecting the consumer

with technology

Vision

We focus on our personnelto implement our philosophy(Skills, Knowledge, Training).

A consumer should always find a solution entering a Germanos Shop

TelesystemsTelesystems• Cordless Phones

• Simple Phones

• Accessories (Original & Own)

• Telefax Machines

• Consumables

• Answering Machines

ServiceService• In-store level 2

Authorized Service for handsets

• Service for cordless phones

• Service for batteries

• Small appliances service

AccessoriesAccessories• Hands-Free

• Batteries;

• Chargers;

• Cases / Fascial

MicrodigitalMicrodigital• Personal Audio

• Digital Image

• Calculators (simple/scient)

• PDAs

• Laptops

• Games

Mobile Mobile TelephonyTelephony• Post-paid connections

• Pre-paid connections

• Pre-paid Packs

• Recharging Cards

• Handsets

InternetInternet• Connections

• Renewals

Fixed Fixed TelephonyTelephony• Connections

• ISDN lines - other lines

• Other

Product & Services Mix

International Presence

Germanos outlets present

Outlets Currently Operating

285

15

44

64

120

18

Target

Target withinTarget within 2003… 2003…

……700 stores in Greece and abroad700 stores in Greece and abroad

Greece – The results…

Store Evolution - Greece

47 60 73120

200 230 260 300

330

100

200

300

1994 1995 1996 1997 1998 1999 2000 2001 2002E

Stores today:Stores today: 285285

•Company operated: 25

•Franchise operated: 260

MOBILE TELEPHONYMOBILE TELEPHONY

35% m. share in new subscribers

40% m. share in mobile terminals

60% m. share in cellular accessories

70% m. share in handset repairs

OTHER PRODUCT CATEGORIESOTHER PRODUCT CATEGORIES

30% market share in cordless phones market

15% market share in fax terminals market

80% market share in specialized batteries market

15% market share in Video Games

Mobile Telephony ConnectionsCurrent Market Share

20%

30%

40%

1998 1999 2001

Cooperation with 3 operators:

• Telestet

• Cosmote

• Vodafone

Greece – The results…

More than 6,000,000 customers annually;More than 6,000,000 customers annually;

Outstanding consumer awareness in mobile telephony:Outstanding consumer awareness in mobile telephony: Top of Mind awareness Top of Mind awareness 65%65% (2(2ndnd choice: 11%) choice: 11%) Spontaneous awarenessSpontaneous awareness 85%85% (2(2ndnd choice: 50%) choice: 50%)

Most likely source of purchase of a new mobile phone:Most likely source of purchase of a new mobile phone: Germanos: Germanos: 50%50% All operators together:All operators together: 23%23% Germanos customers loyalty:Germanos customers loyalty: 88% - 90%88% - 90%

Where would consumers go for handset repair?Where would consumers go for handset repair? Germanos:Germanos: 51%51% All operators together:All operators together: 22%22% Manufacturer:Manufacturer: 10%10%

National Country CoverageNational Country Coverage

• All prefectures are covered;All prefectures are covered;

• All cities above 10,000 inhabitants are All cities above 10,000 inhabitants are

covered;covered;

• Each outlet covers ~ 35.000 people.Each outlet covers ~ 35.000 people.

Poland

Store Evolution - Poland

90112

00

50

100

150

2000 2001 2002



Cooperation with 1 operator:

• ERA GSM

Comments:Comments:Operations started in February 2001 via acquisition of a local chain

(Eko-Contel Poland - a chain with 54 outlets - was acquired)

Second acquisition in November 2001

(TCM Poland - a chain with 40 outlets - was acquired)

Already the biggest retailer in the country.

Country Information:Country Information:

Population: 39 mil

Penetration of Mobile Telephony: 35 %

Romania

Store Evolution - Romania

3 6 18

4260

10

10

20

30

40

50

60

1997 1998 1999 2000 2001 2002



•Franchise 6

Performance:Performance:

Market leader (10% share of new post paid connections)

MOBILE TELEPHONY 36% top of mind awareness

(January 2002)

1st independent dealer to cooperate with Connex and another operator

Cooperation with 2 operators:

• Connex

• CosmoRom

Comments:Comments:Germanos Telecom Romania founded in 2000


Population: 23 mil

Penetration of Mobile Telephony: 22%

Bulgaria

Store Evolution - Bulgaria

1 2 8

3044

10

10

20

30

40

50

1997 1998 1999 2000 2001 2002

Stores today:Stores today: 44 44


•Franchise operated: 11

Performance:Performance:

The biggest independent retailer

MOBILE TELEPHONY 17% current market share in connections

(leading position among independent dealers)

26% top of mind awareness

98% total awareness

Cooperation with 1 operator:

• Globul

Comments:Comments:Germanos Telecom Bulgaria founded in 2000

Cooperation with local operator started in September 2001

Country Information:Country Information:Population: 8.2 mil


Cyprus

Store Evolution - Cyprus

1013

18

5

0

5

10

15

1999 2000 2001 2002



Comments:Comments:Operations started in 1999, via a joint-venture agreement with a local company;

Infotel is the country distributor of Motorola and Epson

Cooperation with 1 Operator

(Only 1 operator in the country)

Performance Indicators:Performance Indicators:

Market Share - Handsets: 28%

Consumer Survey:

Top of Mind Awareness: 50%

Consumer Awareness of Germanos Outlets: 96%

Intention to buy handset from Germanos: 49%


Population: 700.000


FyroM

Store Evolution - FyroM14

22

0

5

10

15

20

2000 2001 2002



Under Negotiation for Cooperation

with one or two operators:

• Mobimak

• OTE

Comments:Comments:

Germanos operating company founded in Mar 2002

Already 14 stores in operation

Market leader in mobile handset sales

International Expansion

Criteria for Entering a MarketCriteria for Entering a Market

Low Penetration of Mobile TelephonyLow Penetration of Mobile Telephony

Low Barriers to EntryLow Barriers to Entry

Expansion Operational PlanExpansion Operational Plan

Delta Force Team for the establishment periodDelta Force Team for the establishment period

Development of local PersonnelDevelopment of local Personnel

Matrix Organization supports on going trainingMatrix Organization supports on going training

Consistent Strategy Applied to all CountriesConsistent Strategy Applied to all Countries

Country Selection Criteria

Operators Attitude (2 or more

operators)

Geographic Proximity

Market size - population

Mobile telephony penetration -

future projections

Politico-Economical Landscape

Distributors / Retailers Landscape

(no dominant Retailer)

Scope for market leadership

strategy

Distributors remuneration schemes

Investment and Entry Costs

Decision Procedure:

•Evaluation

•Alternative Tactics

•Feasibility Study

•Decision

•Implementation

Penetration Tactics:

•Green Field

•Joint Venture

•Acquisition

•Master Franchise

International Expansion

STRATEGSTRATEGYY

Mass purchasing4. Increase Margins and Returns:4. Increase Margins and Returns:

Renegotiation of terms

Franchising3. Expansion:3. Expansion:

Advertising2. Building the brand:2. Building the brand:

Educating local management

Own stores1. Learning period:1. Learning period:

Transfer of Know-How

Transfer of Know-How

Organizational ElementsThe organization is built on the patterns of mother companyCommon values/methods - Strong local decision making

Development of local personnel

Re-allocation of mother company staffSuccessful staff are initially re-allocated in new companies

Central Support TeamResponsible for continuous knowledge transfer and communicationMarketing, Product Mgnt, Service, Logistics, IT, Finance/accounting, Procurement

Know-How documentationManuals produced - updated

Training

Transfer of Best Practices and Key Learnings

How you transfer Franchise

Issues to considerIssues to consider

Time to adopt model to local conditions Time to adopt model to local conditions

Time to build the brand Time to build the brand

Flexibility of individual businessman (franchisee)Flexibility of individual businessman (franchisee)

Penetration of franchise as conceptPenetration of franchise as concept

Level of local business maturity and entrepreneurial Level of local business maturity and entrepreneurial attitudeattitude

Investment level per franchisee vs GDPInvestment level per franchisee vs GDP

Germanos Core Values

Knowledge

Trust

Friendliness

Service

EXPERTISE

How do you transfer values ?

How do you achieve common Culture?

Some Tips for Success

1. We are No 1, We act like No1

2. Lean and Thin Back Office

3. Few people highly qualified, highly paid upon performance

4. Performance = achievement of objectives

5. Invest time and effort in Front Office (stores)

6. Aggressive and consistent action plan to support high sales

7. Aim over achievement, reward over achievement

Presentation to Aegean Univerity

THINK GLOBAL

ACT LOCAL

GERMANOS GROUP OF COMPANIES April 2003 1. Business Segments Retain 26% 3.6% 4%-5% growth Strong...

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Transcript of GERMANOS GROUP OF COMPANIES April 2003 1. Business Segments Retain 26% 3.6% 4%-5% growth Strong...