DARING TO ADAPT MESSAGE FROM THE MANAGEMENT

Size: px

Start display at page:

Download "DARING TO ADAPT MESSAGE FROM THE MANAGEMENT"

Jessie Small
5 years ago
Views:

MESSAGE FROM THE MANAGEMENT DARING TO ADAPT In 2014, our key performance indicator, the current consolidated result before tax, group s share, was 11.

1 MESSAGE FROM THE MANAGEMENT DARING TO ADAPT In 2014, our key performance indicator, the current consolidated result before tax, group s share, was 11.5% down at EUR million, in line with our forecast made in mid-december. This change however reflects a very different situation in each of our two activities. 2

2 In automobile distribution, in a roughly stable market, D Ieteren Auto ended the year with an aggregate market share excluding registrations of less than 30 days of 22.67%, which is the third best result in its history. Market shares for both Škoda and Porsche reached an all-time high. Volkswagen, with a market share above 10%, retains its position as market leader in Belgium. D leteren Auto sales were up by 1.3% and its current operating result rose by 14.1%. In vehicle glass repair and replacement, Belron faced very different situations depending on geographical areas, in the main due to the impact of an exceptionally mild winter in Europe and an extremely severe winter in the US. Thus, despite organic sales growth of 1.3%, the marginal contribution from the significant sales uplift in the US could only partially offset the impact of the declines in Europe, which explains the 16.3% downturn in Belron s current operating result. Last year both activities made substantial investments to ensure their development and secure their future. D leteren Auto acquired ten Beerens and three Claessens dealerships, all located on the Brussels-Antwerp axis, in January and May 2014 respectively. The cost of these acquisitions was approximately EUR 31 million (real estate and net debt included). On its side, Belron invested EUR 14 million in acquisitions to strengthen its presence in the main in the US, Spain, Italy and Canada. A dividend of EUR 44 million was also paid to D leteren s shareholders. The group s consolidated net financial debt increased to EUR million in December The financial position remains particularly healthy given an equity of over EUR 1.6 billion. The Board of Directors has therefore decided to propose to the General Meeting the payment of an unchanged gross dividend of EUR 0.80, in line with its dividend policy of ensuring, absent major unforeseen events, a stable dividend or, results permitting, a steadily growing dividend from the level of In 2015, D Ieteren Auto expects to operate in a stable automotive market compared with In this context, the market share should remain at the same level as In the case of Belron, moderate organic sales growth is anticipated in a market where unfavourable underlying trends are likely to continue. After an initial mild period, winter conditions in Northern Europe became harsher, and North America experienced a relatively severe winter. The benefits from the restructuring expenses incurred at the end of 2014 are expected to flow through in D leteren consequently expects an increase in its 2015 current consolidated result before tax, group s share, in excess of 10% on The environment in which the group s two activities operate is characterized by stability (D leteren Auto) or by a mixed trend in underlying market outlooks (Belron). A key objective is therefore to adapt their capacity to market conditions. Both group activities launched a series of major profitability improvement measures from At D leteren Auto, the new organization of its distribution network is now in place and is based on the division of the territory into homogeneous market areas in order to improve the profitability of the independent dealers through an enhanced competitive position and economies of scale. In November 2014, the 27 market areas were defined and the market area leaders the independent dealers who will manage their respective market area were selected. In D Ieteren Activity Report

addition, the footprint of D leteren Auto s corporately-owned dealerships is currently being optimized. The activities of two dealerships have already been relocated at the end of 2014.

vehicles business in Germany, the restructuring of certain branches and back-offices in the Netherlands and Italy and the discontinuation of the wholesale business combined with branch closures in

3 addition, the footprint of D leteren Auto s corporately-owned dealerships is currently being optimized. The activities of two dealerships have already been relocated at the end of In the case of Belron, a string of profitability improvement measures were announced in December 2014, including the transformation of the UK operating model, the closure of the heavy commercial vehicles business in Germany, the restructuring of certain branches and back-offices in the Netherlands and Italy and the discontinuation of the wholesale business combined with branch closures in China. Good progress has been made on all of these actions since they were announced. The objectives for 2019, announced at the end of August 2014, remain unchanged. At D Ieteren Auto, assuming a stable market share and a slight improvement in the average value per new vehicle sold, we aim for an annual average sales growth by around 2.0% between 2014 and The operating margin should reach approximately 2.5% by At Belron, assuming normalised winter weather, we expect average sales to grow annually by around 3.0% between 2014 and 2019, plus a 1% acquisition growth. Moreover, Belron aims for an operating margin of around 8.0% by In the longer term, the D leteren group continues to seek to invest its available financial resources in order to ensure its long-term growth, on the one hand through its current activities and on the other hand through the acquisition of one or several new ones. The selection of this activity will be made through criteria such as the quality of the sector and its long-term perspectives, the quality, leadership and growth potential of the considered investment and the low risk of technological or regulatory changes. The focus is not solely on automotive-related activities. We are also considering the possibility of making acquisitions alone or in partnership. From 4

a practical viewpoint, the search process consists of proactive searching in segments meeting our criteria while also remaining open to market opportunities.

4 a practical viewpoint, the search process consists of proactive searching in segments meeting our criteria while also remaining open to market opportunities. Finally, we remain aware that we have the responsibility to conduct our business in an ethical and professional manner, while at the same time paying close attention to social and environmental challenges*. For this reason, D Ieteren ensures that it reduces the impact of its activities on the environment, plays an active role in the development of the communities in which it operates, as well as maintains long-lasting relationships with all its customers, staff, partners and investors. Each business organises its own corporate responsibility policy independently so as to best meet the specific challenges it faces, while at the same time complying with the rules and values of the group. In 2014, more than ever, corporate social responsibility has been at the heart of our two activities. The pages 38 to 55 show the efforts that were made last year at D Ieteren in terms of environment, ethics, enhancing staff skills and supporting the local communities. We would like to congratulate the proactive teams in both our businesses on what they achieved last year under very difficult circumstances. We would also like to thank our customers, partners and shareholders for their loyalty and trust. Axel Miller Chief Executive Officer Roland D Ieteren Chairman * D Ieteren complies with the reporting standard of the Global Reporting Initiative (GRI) on sustainable development see page 97 of the 2014 Financial and Directors Report. This report meets the level C standards. D Ieteren Activity Report

KEY FIGURES BY ACTIVITY EXTERNAL SALES 5,541.6 EUR million CURRENT OPERATING RESULT* 198.6 EUR million 48% 52% 27% 73% (EUR million) 2013 2014 Change D'Ieteren Auto 2,627.4 2,660.5 +1.3% Belron 2,843.

5 KEY FIGURES BY ACTIVITY EXTERNAL SALES 5,541.6 EUR million CURRENT OPERATING RESULT* EUR million 48% 52% 27% 73% (EUR million) Change D'Ieteren Auto 2, , % Belron 2, , % Total 5, , % (EUR million) Change D Ieteren Auto % Belron % Total % * Before unusual items and re-measurements. 6

6 CURRENT RESULT BEFORE TAX*, GROUP S SHARE EUR million AVERAGE WORKFORCE 28,360 average full time equivalents 33% 67% 6% 94% (EUR million) Change (average full time equivalents) Change D Ieteren Auto % Belron % Total % D Ieteren Auto 1,601 1, % Belron 25,645 26, % Total 27,246 28, % * Before unusual items and re-measurements. D Ieteren Activity Report

KEY EVENTS 2014 92 nd BRUSSELS MOTOR SHOW Held from 16 to 26 January, this major event attracts around 585,000 visitors.

JANUARY TEAMWORK ACROSS CONTINENTS Almost 60 technicians from Europe travel to the USA to help meet high demand due to the abnormally cold winter in the Eastern and Central United States.

In addition, snowfall approached record high levels in many of the major metropolitan areas across the country.

7 KEY EVENTS nd BRUSSELS MOTOR SHOW Held from 16 to 26 January, this major event attracts around 585,000 visitors. D Ieteren Auto presents a number of standout new models including the Volkswagen XL1, e-up! and e-golf, the Audi A3 Convertible, the Škoda Rapid Spaceback and the SEAT Leon ST. JANUARY TEAMWORK ACROSS CONTINENTS Almost 60 technicians from Europe travel to the USA to help meet high demand due to the abnormally cold winter in the Eastern and Central United States. In New York City temperatures dropped to their lowest level in almost a decade, and seven states registered a top 10 coldest winter. In addition, snowfall approached record high levels in many of the major metropolitan areas across the country. MARCH BEST OF BELRON Following a series of national and regional competitions, the Best of Belron competition takes place in Rome on 21 and 22 May, showcasing the world class expertise of Belron s technicians. The event is held every two years and is a celebration of the technical and innovative skills and training within Belron (see page 33). MAY RESHAPING THE DISTRIBUTION NETWORK D leteren Auto announces its intention to reshape its distribution network by dividing it into homogeneous market areas organised in order to improve the profitability of the independent dealers through an improved competitive position and economies of scale. In late February D leteren Auto had already announced its intention to rethink the footprint and structure of the D leteren Car Centers, its corporately-owned dealerships in the Brussels area, in order to improve their financial and commercial performance (further details on pages 13 to 17). AUGUST 8

D IETEREN AUTO STRENGTHENS ITS PRESENCE ON THE BRUSSELS-ANTWERP AXIS D Ieteren signs a letter of intent to acquire a dealership held by the

September. This global effort sees over 1,000 individuals swimming, cycling and running in aid of Afrika Tikkun (see pages 54-55).

8 D IETEREN AUTO STRENGTHENS ITS PRESENCE ON THE BRUSSELS-ANTWERP AXIS D Ieteren signs a letter of intent to acquire a dealership held by the Claessens group in Wilrijk (effective in May) as well as to acquire a controlling interest in the three dealerships held by the ACM group in the Malines region (see page 18). TWO DEPUTY CHAIRMEN Nicolas D Ieteren and Olivier Périer succeed Maurice Périer, who has reached the age limit, as Chairmen of the Board of Directors of the group. APRIL MARCH BECSA AWARDS BELRON TRIATHLON Belron employees from 22 countries gather at the 2012 Olympic venue of Dorney Lake (UK) on 27 September. This global effort sees over 1,000 individuals swimming, cycling and running in aid of Afrika Tikkun (see pages 54-55). The Belron Exceptional Customer Service Awards are a popular accolade that recognise employees from all over the world who go above and beyond their daily role. On 11 November Belron s CEO Gary Lubner announces 22 award winners from 13 countries, from an outstanding list of nominations (see page 53). NOVEMBER SEPTEMBER ALL-TIME THIRD BEST MARKET SHARE The makes distributed by D Ieteren Auto rack up an aggregate market share of 21.78%, the third best performance ever! Škoda and Porsche both achieve a record market share, whereas Volkswagen remains the preferred brand of Belgian car owners and the only one to top 10% in terms of annual market share. DECEMBER D Ieteren Activity Report

Respect for customers, partners and staff. Service: another name for the respect that a company owes its customers, partners and staff.

Respect for customers, partners and staff Service: another name for the respect that a company owes its customers, partners and staff. Vehicle glass KEY FIGURES (in EUR million) 2004 2003 % change Total