Presentation to
Reunert Investors
26 September 2007
Martin Maddox
Products and Services
Nashua Electronics
Group Finance
•Finance and accounting
•Warehousing and logistics
•Parts
•Service networks
•Distribution Creditors and
debtors management
Manufacturing
Distribution
Retail
Manufacturing
Panasonic
Systems
Panasonic
Business Systems
•OA
•Telecommunications
•CCVE
•Air conditioning
•Presentation
•IT Products
+
•Installation/Service
/Reticulation/Support
•OA
•Telecommunications
•Broadcast
•CCVE
•Presentation
•IT
Panasonic
Consumer
•Brown goods
•White goods
•Batteries and media
•Small appliances
•Photographic
•Air conditioning
Futronic
Nashua
•Brown goods
•Air Conditioning
•White goods
•Small appliances
Nashua Electronics
•CCVE (Consumer)
•Hardware
E-commerce/Retail
•Electronic consumer
products (top brands)
•Electronic Retail business
products (top brands)
•Delivery/Installation/Advice
/Support
Systems Business
Five business units
1.
2.
3.
4.
5.
Office Automation & IT
Telecommunications
Presentation Systems
CCVE Systems
Broadcast Systems
Common Key Success Factors
1.
2.
3.
4.
5.
6.
7.
Steep technological development
curve (Digital Product)
Direct dedicated distribution
BEE requirement
Brand identity (distribution and
consumer awareness)
Turnkey Solution
Critical importance of software/IT
Broadband / I.P. products
Major hurdles facing Distributors in the
Consumer Electronics Industry
•
•
•
•
•
•
•
•
Ease of entry to the market
– Digital technology
– Speed of R&D development
– Transfer of technology
Potential Market Slow Down
– Interest Rates
– Credit Bill / Controls
– Slow down in housing boom
Brand Premium Erosion
Management of Forex
Duty Evasion
New industry competition through product convergence
– I.T. Companies
– Broadcasters
Limited new Product developments
Price Erosion
Unit Price Erosion
100
90
80
70
60
50
40
30
20
10
0
DVC
DSC
Plasma
LCD
2003
2004
2005
2006
2007
Major hurdles facing Distributors in the
Consumer Electronics Industry
•
Ease of entry to the market
– Digital technology
– Speed of R&D development
– Transfer of technology
•
Potential Market Slow Down
– Interest Rates
– Credit Bill / Controls
– Slow down in housing boom
•
•
•
•
Brand Premium Erosion
Management of Forex
Duty Evasion
New industry competition through product convergence
– I.T. Companies
– Broadcasters
•
•
•
•
Limited new Product developments
Price Erosion
Excessive logistics and warranty costs
Dominant power of retailer
Consolidation of key accounts
45
40
35
30
25
20
15
10
5
0
40
Key Accounts
30
20
1980
1990
2000
12
?
Current
2010
No. of Key Accounts
J D Group
Lewis Stores
O K Furniture/Shoprite
Massmart
Ellerine Holdings
Metcash
Pick ‘n Pay
Iser Group
Furnex Group
Spar
Group Appliance
Shaw Group
Consumer Electronics Industry
Industry Margin
Industry Power
Before
2000
2005
2010
and
beyond
Before
2000
N/A
Low
+20%
Designer/
R&D
software
Low
+20%
+10%
Comp.
Manufact.
+20%
<5%
Very
Low
Prod.
Manufact /
+20%
<5%
Very
Low
Distributor
+10%
+20%
+10%
Retailer
-
-
-
Consumer
2005
2010
and
beyond
Retail Strategy
E-commerce
1.
2.
3.
4.
Retail Stores
(own and franchises)
Leverage Nashua Brand Equity and Advertising
Source and sell Multi brands
Prepare for shortening of distribution pipeline
(Consumer & Systems products)
Position for e-commerce evolution
Percentage of Internet Usage
80.00%
70.00%
60.00%
Percentage
50.00%
South Africa
USA
40.00%
UK
30.00%
20.00%
10.00%
0.00%
2002
2003
2004
Year
2005
2006
E-Commerce % Market Share of
Total Retail Sales (USA)
20.00%
18.00%
16.00%
Percentage
14.00%
12.00%
2000
2001
10.00%
2002
2003
8.00%
6.00%
4.00%
2.00%
0.00%
Books and
Magazines
Clothing, Footwear
and Accessories
Computer
Hardware and
Software
Electronics and
Appliances
Category
Music, Vidioes and
DVD
Office Supplies
and Equipment
Furniture and
Home Furnishing
Consumer Goods Internet vs Traditional
Retail Sales by Product Type
(European Countries) Jan-Mar 2007
100
8.2
90
13.4
15.4
86.6
84.6
5.9
8.5
13.1
94.1
91.5
86.9
4.5
4
95.5
96
80
70
60
Internet
Traditional
50
91.8
40
30
20
10
nc
es
tic
D
om
al
l
Sm
A
pp
lia
A
pp
lia
nc
es
es
ot
o
Ph
M
aj
or
on
s
D
om
um
er
es
tic
El
ec
Te
le
c
tr
on
ic
s
om
ar
e
ffi
c
e
H
ar
dw
ch
no
lo
gy
O
C
at
rm
In
fo
C
on
s
um
er
io
n
Te
Te
ch
M
ar
ke
t
0
Consumer Goods Internet vs Traditional
Retail Sales by Country
(European Countries) Jan-Mar 2007
Internet
Sales
8,1 %
12,1
11,4
10,5
9,1
8,1
7,3
6,2
5,2
4,6
2,8
1,7
87,9
88,6
89,5
90,9
91,9
92,7
93,8
94,8
95,4
97,2
98,3
DE
CZ
UK
NL
FR
CH
AT
SE
IT
PL
ES
Trad. Sales
91,9 %
Online CE retail will reach 24%
of total CE retail sales in 2011
UK Industry result by category
DSC - 2006
DSC - 2007
18%
Traditional
Internet
CAM - 2006
LCD - 2006
PDP - 2006
8%
9%
CAM - 2007
15%
LCD - 2007
PDP - 2007
13%
14%
17%
20%