2017
Corporate Brochure
CONNECTING TECHNOLOGY TO CUSTOMERS
INTRO
3
DRIVEN BY ADDED-VALUE W
ith data creation growing exponentially in both the business and consumer space, the demand for effective storage and security solutions will increase, and a sound understanding of the opportunities created by this data explosion is even more vital. CMS Distribution is determined to be a leader in both business and consumer solutions, and has been expanding in the UK and across Europe in the last year through organic growth and acquisition, to widen our reach, enhance our customer offering and bring new solutions to market. We have simultaneously focused on continuing to provide a gold-standard service to both our customer and vendor partners. We intend to stay focused and relevant to our marketplace, identifying new technology trends and growth opportunities for our customers; ensuring our biggest asset – our people – are the most knowledgeable and customer-focused in the market.
We believe it’s important to remain flexible, agile and responsive for both our customers and vendors, while being able to scale to our customers’ needs. Over the last 29 years, I can safely say that we have demonstrated that there is room for a value-added player in the market and we will strive to be that player of choice. I would like to thank you for your support and commitment and look forward to working with you and your business in the future.
Frank Salmon CEO & Founder
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BUILDING FOR THE FUTURE pg.6
CMS VOICE pg.12
WHO WE ARE pg.11
CONNECTING PARTNERS pg.30
BATTLE FOR THE B2B HEARTS pg.22
CMS IN THE COMMUNITY pg.15
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CONTENTS DRIVEN BY VALUES Building for the future Timeline European tech hub
CMS COMMUNITY Who we are CMS voice CMS in the community
6 8 10 11 12 15
INTERNATIONAL SNAPSHOT 16 TECHNOLOGIES Tracking the industry trends Our customers' voice Battle for the B2B hearts The detail in retail
FINANCIAL PROFILE CMS hails record year
ADDED-VALUE Connecting partners Improving our efficiency
18 21 22 25 27 30 32
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DRIVEN BY VALUES
BUILDING FOR THE
FUTURE CONSOLIDATION in the distribution space is creating clear market leaders in terms of innovation. Looking back at a year of phenomenal growth, CMS Distribution founder and CEO Frank Salmon expands on the opportunities ahead.
82% GROWTH YEAR ON YEAR 2016
DRIVEN BY VALUES
D
istribution is a ruthless industry - even more than before, with a smaller deck of players in the pack (and shrinking), and a thirst for value- add offerings from both vendor and reseller customers. Players that have been in the market for decades have survived a period of unprecedented change, and only the bravest – those that are prepared to reinvent themselves and invest in success – are rising to the top. Over the past 12-18 months, CMS Distribution has been at the forefront of that reinvention cycle, opening up a brand-new office in central London in the Tech City area, and achieving organic growth in the region of 20 per cent in the last 12 months. It also posted record results in April 2017, with turnover up 82 per cent. One of the biggest growth opportunities for CMS over the last year was gaining access to the European market, through a series of well-executed acquisitions – firstly Widget Investment Group – which guaranteed a presence in Benelux, and secondly becoming a majority shareholder in Newgen Distribution, giving extensive coverage of the Scandinavian market. To cap off a busy year of acquisitions, CMS acquired TNS Connect in February 2017, opening a whole new retail market and, crucially, getting access to the vast network of Apple resellers and retailers. CMS also cut the ribbon on a brand new office in Spain, widening its geographical reach even further, and there is more to come. “Through all that disruption we kept the show on the road, and focused
on providing our vendor partners and customers with an excellent service,” he said. “Our focused approach to market with key vendors is vital – we can only do that by understanding our customers and their customers. We have to stay very focused and invest in all our people to ensure we stay relevant.” “We have invested a lot in systems and processes – creating platforms that will deliver the technology according to customer expectations, and ensuring we have the accreditations to enable our customers. For example, we have had to build out a new system to deliver monthly billing [for MSPs], enabling our customers to stay relevant to
ability to manage relationships. Everybody goes through an induction where we share our values so they understand how CMS works and what our approach is. It has created a respectful, sustainable model that our people can support,” he said. Looking ahead, acquisition is set to play a significant role in CMS’ growth strategy, with a number of potential acquisitions in the pipeline, according to Salmon. The emphasis will be on the value space, potentially in the software arena, and most likely to be
“
We are committed to investing in our people’s future and strive to ensure everyone feels valued. ”
- Frank Salmon, CEO market demands.” Keeping staff engaged is a priority for CMS which operates a fourpronged ‘POPE’ approach – People, Operational Excellence, Profitable Growth and Exceeding Expectations. “I’m a big supporter of our people,” Salmon said. “Through our staff we can deliver the customer experience. My ambition was always to create a learning organisation, and in recent years, as we have cranked up growth, that mindset has been kicking in. That is our intellectual property. We invest in our people and their
£
350+ EMPLOYEES
7
£500M REVENUE TARGET
UK-based or mainland Europe. However, the TNS Connect acquisition has given CMS a presence further afield in Australia, China and Hong Kong, effectively meaning a ‘pan-regional’ reach, and potential for additional expansion further down the line. As the divide between value-added and broadline distribution continues to widen, being able to scale and add-value at the same time is going to be a vital differentiator in the future.
12 LOCATIONS
DRIVEN BY VALUES
8
1988
1991
Founded in London by Frank Salmon
1993 Launched CMS Peripherals in Ireland
8 People £
Sales of over
£1m+
Aiming to become the UK and Ireland’s largest independent storage distributor
2014 Move to new flagship office
2015
Worship Street, London £
Logistics & integration centre opens in
Castleford
SAP System integration
Sales of over £178m+
2016 215 People £
£325m+ revenue
Aquisition of:
Majority share holder:
DRIVEN BY VALUES
1998
1994 30 People £
Sales of over
£10m+
75 People £
Sales of over
£50m+
140 People £
2004
Sales of over
£100m+
2011
2013 Rebrand to:
Aquisition of:
Aquisition of:
TODAY
350 People
Aquisition of:
12 Sites in Ireland, UK, Sweden, France, Netherlands, Spain, China and Australia £
£500m revenue target
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DRIVEN BY VALUES
10
EUROPEAN TECH HUB With many technology vendors choosing Ireland to house their EUROPEAN HEADQUARTERS, it is vital to be at the top of your game to maximise those opportunities. CMS Distribution has big plans for the IRISH MARKET.
2017 Tech Excellence Awards Company of the Year Channel Programme of the Year
I
reland, like all countries, has faced the challenge of keeping up with the pace of technology change, but it is also home to an unusually high concentration of global IT manufacturers – including all the top ten global vendors such as Microsoft, Dell, Lenovo, Intel and Apple, plus many more - that build a real European tech hub. In February 2017 CMS Distribution acquired TNS Connect, headquartered in Dublin. With a service centre, based in County Mayo and an additional sales office in Dublin, it is perfectly positioned to service local customers and vendors; in both the Business and Retail space. One of the biggest opportunities for CMS is created by data accumulation and the forthcoming changes to the EU General Data Protection Regulation (GDPR) – set to be enforced on May 25th, 2018. “GDPR has become a priority for the world in general and not just in IT,” explained Patrick Healy, Managing Director of CMS Distribution Ireland. “Our customers – MSPs and VARs – are having to embrace the technology that can manage these issues. Security and data management are the two areas we feel will grow over the next few years.”
Value-add is key to success in the Irish market, he explained, and CMS Ireland houses a technical pre-sales team that can work with vendors to train their partners, but also work with the partners themselves to sell to end-user customers. That in-depth employee technical knowledge, coupled with a strong vendor portfolio, ensures CMS Ireland is tied into its customer base. On the retail side, the two key acquisitions of TNS and Widget have ensured CMS Ireland has a fully comprehensive portfolio of consumer electronic products to sell through its partner base, with plenty of extra potential. John McHugh and Ivan Eustace co-founders of TNS Connect, said the opportunity was huge. “We see considerable potential in the APR (Apple Premium Reseller) segment which is well established in Ireland,” they said. “We have become a key player in bringing Apple third party products to Europe and the Asia Pacific region and you will see the fruits of this coming through as we build the APR channels in Ireland and Europe. On top of this, we see some incremental opportunities in specific specialist retail sectors and we are working closely with our key vendors to develop them.”
CMS COMMUNITY
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WHO WE ARE Our vision, mission and values capture in words the spirit of CMS Distribution and what we stand for.
Vision
Mission
We see a future where everyone knows that CMS connects the best technologies to the smartest customers.
Empower remarkable people to exceed expectations through the continual pursuit of service excellence and the delivery of the most innovative technologies to our customers.
OUR VALUES Our four core values define us and the way we work with our business partners at any time, under any circumstances:
People
People are the core of our business – whether they are our customers or colleagues. We are committed to investing in our people’s future and strive to ensure everyone feels valued.
Operational Excellence
We continuously seek out opportunities to improve our efficiency and effectiveness through our people, processes and technology.
Profitable Growth
As Europe’s leading specialist technology distributor, it’s critical that we drive continuous improvement and stay ahead of the competition.
Exceeding Expectations
We are dedicated to exceeding the expectations of our customers, vendors, colleagues and ourselves this is our end goal.
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CMS COMMUNITY
CMS VOICE Great people are what make a business. And it is the people that make CMS Distribution the company it is today. We currently have more than 350 talented people across 12 locations AMSTERDAM, CASTLEFORD, DUBLIN, HARROGATE, KILTIMAGH, LONDON, MADRID, PARIS, SHENZHEN, STEVENAGE, STOCKHOLM AND SYDNEY. Below some of the team share their journey with CMS. Gary Hogan Outbound Planning Manager, Castleford Gary started at CMS in December 1996 in the warehouse, and after two years joined the stock control team, which he ended up managing. “Being the stock controller meant I had to work closely with the warehouse, the returns department, customer services, finance and sales teams, giving me lots of experience in how the industry works
Matthew Angel Senior Account Manager & Retail Team Leader, Harrogate
A highlight of my career was closing my first £1m order during my first two years as an account manager.” Matt says that securing his place on the CMS Sales League trip to “I started at CMS eight years ago as the content manager & support CES in Vegas for the third year in for the Amazon account manager, a row counts as the most exciting thing he has done and combines but realised fairly quickly that his passions of travel, food and there was good opportunity for socialising. progression within CMS. After “We’ve got a really strong sense a year I moved into an account of teamwork throughout the manager role. In 2017 I took on business and my role is varied a team leader role and I am now which always keeps things responsible for six people. interesting,” he said.
and I developed many good relationships with all the people in different departments,” he said. “After 15 years in the role and helping to develop the retail bookings team, I became the retail bookings planner. When I started at CMS it was a small company with a family feel about it. Now, even though we have grown so much, we still have managed to keep that family feel which is important for me.”
CMS COMMUNITY Patrik Steen Business Development & Events, Stockholm Patrik joined Newgen in 2015, becoming part of the CMS family in 2016. “What I like about CMS and Newgen is that they capitalise on my abilities. I feel CMS is a family that takes care of us as a parent company. I’ve met a lot of competent people with big hearts and a professional attitude towards customer service.” Patrik’s passions include travelling,
music, new tech and design, the latter two he incorporates into his work. “I test and evaluate products and take care of activities like trade shows and events, staff education and product promotion,” he explained. “Social media is part of that work. I’m often the primary contact for new vendors and handle our newsletter to keep partners informed on what’s new. I enjoy the networking part of my job and love meeting and connecting with people to create business opportunities.” Shahla Haddad Account Manager, London “I started in 2015 with zero knowledge of the IT industry, but the support I have had from CMS and my manager throughout my journey, both in learning and development personally and professionally, to date has been remarkable. Being part of a successful team with the aim of winning together makes me excited, we work handin-hand to accomplish targets and celebrate success at the end of
Rachel Cluderay Senior Account Manager, Stevenage
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accounts in our business. Customer service and forming lasting working relationships are my passions,” she said. Rachel added that the acquisition Rachel started her CMS of Widget was an exciting part of Distribution career as an account the job and the level of teamwork manager in the Harrogate team, that went into making the process but relocated to London to become a senior account manager a success was phenomenal. “There are many benefits to within the retail sector of the working for CMS, but the main business. one is having the opportunity to “Moving was a fantastic take new and upcoming products opportunity for me and, a to market. Another benefit is challenge! One of my career getting the chance to win a trip to highlights is focussing on and Las Vegas, a definite incentive.” growing one of the top three
each quarter.” Shahla is passionate about art and historical architecture, and enjoys painting at weekends to wind down. “I am also passionate about making a difference, when I’m involved with a project in or outside of work I always give my best”, she said. “I like working at CMS because there is always ongoing development, something new to learn and your hard work is always recognised and rewarded.”
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CMS COMMUNITY
Rebecca Mannion Customer Service Team Leader, Kiltimagh Rebecca started working at CMS in May 2013 after leaving university. She was a junior customer service advisor before getting promoted to the customer service advisor position almost two years later. The highlight of my career was becoming the customer service team leader in summer 2016. The great thing about working at CMS is how people pull together to support you. It is nice to know if
you have any issues that you need resolving, people are willing to help out. In the four years I have been here, I can genuinely say people are very friendly and easy to get on with.”
Philip Kearny Sales Office Manager, Amsterdam Philip, who has a passion for martial arts, has been with CMS since April 2016. Early this year he moved from the Kiltimagh office to our new site in Amsterdam. “My career has gone in a very positive direction. I’ve taken a different route than I expected when I joined last year, but it has been great. There are not a lot of companies that give you the chance to move between offices, Siobhán McHugh Digital Marketing and Events Manager, Dublin After a year-long stint in the marketing department at TNS in 2008, Siobhán spent almost a decade building her experience in marketing and events externally, before re-joining the TNS marketing department in 2014. “I love my role because no two days are ever the same. We always tailor our marketing service to suit vendor needs and turn thoughts into actions.
I love the fast pace of my job in this innovative industry and I enjoy the problem-solving aspect of my role. In fact, the thing I love most is to see the end-result and a task successfully completed.” Siobhán’s many hobbies have taken a backseat after she became a mum, and all her spare time is spent running around after her toddler.
let alone to another country, so that is a career highlight for me. One of the most exciting things he has done so far was last September - a 14,000ft charity skydive, raising €800, thanks to his colleagues’ generosity and the company match scheme. CMS is a great company to work for. It really invests in people and wants to educate and better its employees. The vision for the future of the company is exciting and I look forward to being part of it.”
CMS COMMUNITY
CMS IN THE COMMUNITY CMS Distribution employees are actively involved in raising money for charity and volunteering their time to good causes. Employee fundraising efforts are matched by CMS Distribution. This is our way of supporting the charities and causes that matter most to our employees. In 2016, we COLLECTIVELY RAISED over ÂŁ40,000 for charitable causes:
Training Future Entrepreneurs CMS Distribution sponsors the Junior Entrepreneur Program in London and County Mayo: a 10-16 week entrepreneurial education programme for primary school pupils throughout the UK and Ireland. This innovative programme encourages primary school pupils to develop entrepreneurial skills at a time in their development when they are full of imagination and open to new possibilities. The programme helps
ÂŁ40,000 was raised in 2016
participating pupils to develop a number of skills including presentation, technology, research skills, numeracy, financial, consumer awareness, storytelling, listening skills, creative thinking, problem-solving, team building and collaboration. As a part of the programme, each school creates and implements a business idea, with profits being invested back into the school.
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INTERNATIONAL SNAPSHOT
Harrogate, United Kingdom Nick Preston Commercial Director Harrogate, recently voted one of the happiest places to live in Britain for the 3rd year in a row, is where our newly developed office resides.
Kiltimagh, Ireland Patrick Healy Managing Director Ireland Our friendly office offers the career opportunities of the City without having to leave the tranquillity of the area.
Dublin, Ireland John McHugh & Ivan Eustace Co-founders of TNS Connect The office in Dublin provides the ideal location and bandwidth to comfortably service the high concentration of global IT manufacturers and customers in the area.
KILTIMAGH CASTLEFORD
Stevenage, United Kingdom Frinos Constantinou Retail Sales Director Our new tech retail team is based in Stevenage, where you will feel the buzz of the latest developments in wearables, robots, drones, home automation, VR and other tech ready to be part of consumers’ lives.
MADRID
PARIS
INTERNATIONAL SNAPSHOT
17
OUR 2017 LOCATIONS STOCKHOLM
Amsterdam, Netherlands Bart Hoorntje Managing Director Netherlands Our Amsterdam office strengthens CMS Distribution’s position in the European market.
London, United Kingdom Justin Griffiths Enterprise Solutions Director We are the only IT distributor positioned in the heart of London’s Tech City area, so the office offers a unique value-add.
SHENZHEN
SYDNEY
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TECHNOLOGIES
TRACKING THE INDUSTRY TRENDS
T
INTELLIGENT TECHNOLOGY will see a big growth in 2017.
he lines between business and consumer technology are becoming blurred as the two begin to crossover more regularly. Pluskota said: “Technology innovation often begins in the consumer space, where a product or service has been developed for our convenience. It then finds its way into the business world, where the benefits may improve productivity or work life experience. Conversely, security or storage standards defined in business find themselves built into consumer products as the technology becomes more and more connected�. Many businesses are having to rethink their IT investments as increasing data storage costs and rising security threats are making traditional IT infrastructures too costly and complex to maintain. This pressure is forcing some businesses to entrust the management of their sensitive information to a managed service provider which is having ramifications for the traditional IT reseller. Retailers are constantly looking for the next big trend to ensure their survival in an increasingly competitive
TECHNOLOGIES
19
WITH THE PACE of technological change rushing along at breakneck speed, investing in the right technology at the right time is vital for success. Trevor Pluskota, CIO/CTO, reveals the upcoming technology trends that CMS Distribution is banking on. world. Consumer trends are moving rapidly and are influenced by more factors than ever, social is an example of this. And CMS Distribution has to stay connected to all technology influencers and get the right timing for vendor launches. Both sides are looking for guidance when it comes to placing their bets on the next tidal wave of technology launches. Through a mix of acquisition, staying close to customers and the market, and employing the best people, CMS has ensured it is in pole position to
“
capitalise on the technology of the future, both from a business and consumer perspective, said Pluskota. Businesses are looking for more cost-effective ways of storing data as costs spiral out of control due to the vast amount created on a daily basis. To realise the true value of their data, businesses also need faster ways to access and interpret their information. Open source and software-defined technologies are driving down costs whilst all flash solutions are helping business gain insight into their data. In turn,
We connect the best technologies to the smartest customers.�
- Trevor Pluskota, CIO/CTO
this leads to an increased drive for security of that data, and with cyber threats risking national security at government level this too is a guaranteed growth area for CMS, Pluskota explained. For the consumer, innovation is being driven by a desire for convenience, new ways of communicating and a focus on wellbeing, all this being wrapped around a mobile platform. According to Gartner – the top three technology trends for 2017 are machine learning, augmented or
20
TECHNOLOGIES
virtual reality and intelligent ‘things’ – such as robots and drones. All three are areas that CMS Distribution is investing in. Pluskota added: “Machine learning is going to be a big growth area as businesses strive for increased productivity. In the consumer space, we have the IoT – connected devices in the home and office to drive convenience, help productivity and cut down on waste. The downside of both of these technologies is that they create a lot of data that needs to be stored, and it is paramount that
it is stored securely too. Those two areas are our forte.” As technology trends change, so does the way technology is procured, and this means distributors have to change the way they operate or risk being left behind, Pluskota said. For CMS, this means investing in even more service aggregation, portal technology and expertise in emerging technology fields. Capturing and sharing intelligence gathered through the buying process with vendors also cements relationships and builds knowledge.
Focusing on value-add aspects like marketing, solution building, hosting and simplifying procurement, saves partners time, so they can focus on their products and use CMS as an extension of their own businesses. The technology landscape is changing constantly, but CMS is well placed to capitalise on that and keep growing further.
TECHNOLOGIES
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OUR
CUSTOMERS' VOICE 80%
of respondents consider us TRUSTWORTHY
CUSTOMER SATISFACTION SURVEY 2017*
78% feel we have comprehensive
PRODUCT KNOWLEDGE
72% feel we deliver
VERY GOOD VALUE to their business
77% feel we are
CUSTOMER FOCUSED
*Based on 201 customer responses for our annual survey (April 2017).
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TECHNOLOGIES
BATTLE
FOR THE B2B
HEARTS
2017 Storage Awards Storage Distributor of the Year Storage Solution of the Year
OUR INDUSTRY is going through a period of unprecedented transformation and only those businesses that are flexible and can adapt quickly will survive.
Red Hat® Partner Awards EMEA Red Hat® Distributor of the Year
TECHNOLOGIES
J
ustin Griffiths, Director of Enterprise Solutions, and Nick Preston, Commercial Director at CMS Distribution explain why there is no room for modesty in the battle for B2B hearts and minds. More and more channel companies are making the shift to a managed services model and they need all the help they can get from their distributor of choice, as the biggest challenge is staying relevant in an ever-changing B2B market. Both resellers and distributors are treading an aggressively competitive path to value-added services as they strive to attract the customers necessary for growth. “Being an extension of the vendors we are representing helps our customers who are wrapped up in the likes of Cisco, HP and Microsoft to identify new higher margin opportunities,” said Griffiths. And there is no faster-growing sector in the B2B space than the one covered by the managed service providers (MSPs). Growing the MSP base is a key strategy for CMS, with significant investment made in its SAP system to cater for monthly billing and continued focus on onboarding and developing vendors in the managed service space.
Each MSP-focussed vendor strives to be more sticky with their customers, create annuity and develop more consumption-based channel programmes. CMS has also invested in its own B2B sales teams to keep skills razor-sharp. Nick Preston, Commercial Director at CMS, explained: “We are ensuring that consistent and comprehensive levels of product and technical training are given to all sales staff, so we can provide high levels of customer support in our roles as trusted advisors.” CMS has not neglected its roots either, building on its storage hardware offering through strategic vendor acquisitions – the most recent being leading hyper-converged specialist, Scale Computing. In addition, CMS’ core NAS and SAN
“
It’s critical that we drive continuous improvement and operational excellence."
- Nick Preston, Commercial Director
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TECHNOLOGIES
24
500MSPs In 2016 we have grown our MSP base from 50 to over 500 partners.
�
We are relentless in our search for new and innovative technology opportunities"
- Justin Griffiths, Enterprise Solutions Director
business is delivering double-digit growth through a combination of integrated solutions, laser sales focus and unbeatable product knowledge, Preston added. With traditional VARs and VADs trying to cross-over into new areas of business, particularly in this era of cloud and machine learning-led technology, it is going to be survival of the fittest, and a strong European strategy will prove to be a game changer. It is where CMS has excelled, through both its acquisition and its organic growth strategies. Griffiths said standing out in a crowded market is vital. “We need to have a genuine level of expertise,” he said. “Just being a specialist in one area is not enough, there are many other components that you need to market each vendor. We need to innovate for them as an extension of their sales organisation. The role of distribution is about staying relevant from a technology and consumption perspective. Going back 10 years, we were considered to be just a bank and a warehouse. Now we have the knowledge, systems and technical capabilities to supply a much more automated process.”
TECHNOLOGIES
25
THE DETAIL IN RETAIL DISTRIBUTION plays a valuable role when it comes to the retail sector, and the opportunities in the space are limitless. David Elder, Managing Director of Retail Division, explains why.
D
iscovering and harnessing the next big retail trend is a skill that requires careful investment and a deep level of market knowledge. Since its acquisition of Widget Investment Group in 2016, and most recent acquisition of Ireland-based TNS Connect in February 2017, CMS Distribution has been working hard to integrate the teams, and now boasts a deep well of concentrated retail experience in key technology markets. “The TNS Connect acquisition provided a massive opportunity for us, allowing us to reach the Applecentric vendors. A lot of vendors start off supporting APRs and stores, and these tend to be those quirky vendors that have the potential to become big hits. To have this within the wider CMS Group is an enormous benefit.” The retail space is an exciting and fast
developing one to be in. According to research from analyst house CCS Insight, the wearable device market will be worth £27 billion by 2020, and the global drone market will grow to more than £9 billion by 2020 according to Gartner. Both of these markets are areas that CMS has particular strength in – significantly with fitness tracker Fitbit & DJI drones. Other areas CMS is investing in are connective toys such as Sphero – which are gaining in popularity with both adults and children, and also the mobile photography sector – an area boosted by the TNS Connect acquisition due to its hold on the Go-Pro device and accessory market in related countries. This alone will create significant opportunity in both the general sports and underwater sports markets. Elder said CMS has the benefit of
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TECHNOLOGIES
“
We deliver the most innovative technologies to our customers. ”
- David Elder, Managing Director
£9 Billion
2017 PCR Awards Consumer Electronics Distributor
£27 Billion Wearable technology will grow to more than £27 billion by 2020
The drone market will grow to more than £9 billion by 2020
historic stability of its legacy storage products, mixed with the ‘sexier’ technology gained through its key acquisitions that have the excitement factor. European growth will be a significant focus for the year ahead, he stressed. “We want to present ourselves as a company with a pan-European footprint,” Elder said. “There is a gap in the market for a dynamic VAD to have the geographical spread, and this is extremely appealing to a Silicon Valley vendor, for example.” Retail and distribution go hand in hand, and CMS Distribution is keeping close to its customers to predict and capitalise on the coming trends, Elder explained:
“We need to remain brave, if we see a new product, brand or category on the rise, we want to be involved. We don’t want to be too early, at the stage where people are asking ‘what is that?’ But we want to be early enough to catch the wave of excitement around it, before it becomes mainstream. By staying in touch with retailers and knowing there is change coming, we can push the next brand into the mainstream. We have earned the right to be part of that process and we are one of those players that retail actually comes to and asks ‘what should we be involved in next’?”
FINANCIAL PROFILE
27
CMS HAILS RECORD YEAR WITH REVENUE UP 82% CMS Distribution is determined to break through the £500M TURNOVER BARRIER in the near future on the back of posting record results for its last financial year.
T
he Group, which has made a series of strategic acquisitions across Europe over the past 12 months, is in a position of strength for 2017 and beyond, after an impressive 126 per cent year-on-year EBITDA growth on revenue to £325m. “After reaching revenues of £325m in 2016, the Group’s fiveyear compound annual growth rate (CAGR) is now at over 28 per cent,” said Tom Burke, CFO at CMS Distribution. The boost was evenly spread out across the company, with its enterprise business outpacing the market and driving strong growth in security, information management, storage and open source technologies, and equally strong sales in retail.
“
“Besides the strong organic growth, peer acquisition has also been a core component of this growth strategy over that time. We were delighted to welcome the Widget Investment Group and Newgen Distribution into the Group in 2016, as these acquisitions give us tremendous opportunities to continue to drive industry-leading growth rates.” This achievement was also secured through a combination of prudent cost management, continuous improvement initiatives, system development and strong working capital management, that drove operating margin to new highs, added Burke. Furthermore, the Return on Capital Employed (ROCE) has grown steadily since 2013, rising to 40.4 per cent
We are dedicated to exceeding the expectations of our customers, vendors and ourselves. ”
- Tom Burke, CFO
for the year under review. In distribution, maintaining margins is vital, and Burke explained that with an EBITDA margin of over 3.8 per cent, the Group is continuing to scale efficiently and margin is set to grow beyond 2017. The all-important pre-tax profit trend for the company over the last five years has seen an average 45 per cent increase year-on-year, reaching a peak of £10m for FY 2016. And the M&A activity is definitely not over yet, Burke hinted. “Our balance sheet strength allows us to drive further growth through investments and peer acquisitions,” he said.
FINANCIAL PROFILE
28
LOOKING FORWARD C MS has certainly hit the ground running in 2017 with a solid Q1 start. The acquisition of TNS Connect in February 2017 has added key customers and vendors to the Group, and has widened CMS’ geographical footprint in the Asia Pacific region. Operational efficiency has also been a key focus, with the Group continuing to streamline its management information system with SAP as the group-wide ERP – providing a solid platform for the growth and a key
tool for the business. Further investments in other core systems have also been made with the aim of driving better customer service and efficiency, and enabling CMS to scale even more efficiently. “We have continued to strengthen both our board and our management team, with a combination of internal promotions and selected external hires,” added Burke. “We now have approximately 350 staff across 12 locations and, as our key asset, we continue to invest in training and
6 YEAR RETURN ON CAPITAL EMPLOYED TREND 50%
40.4%
40% 30% 20%
20.4% 16.0%
17.3%
20.5%
22.5%
10% 0%
2011
2012
2013
2014
2015
2016
development, both product-specific and general management training.” This is in conjunction with adding a number of new key vendors and customers to the CMS portfolio over the last 12 months, with a very strong pipeline of new vendor partners to come. “We believe this is the key to providing a solid platform for future growth and we are confident of achieving another healthy return from trading activities in 2017, as we strive to hit the £500m revenue target,” Burke concluded.
FINANCIAL PROFILE
29
6 YEAR PROFIT BEFORE TAX TREND £10m 10 8 6 4 2
£1.58m
£2.21m
£2.26m
£3.23m
£4.25m
0 2011
£324.5m revenue
2012
2013
2014
2015
2016
6 YEAR REVENUE TREND 330
£324.5m
300 270 240
£178.2m
210 180
EBITDA growth of 126% over 2016
150 120
£97.9m
£133.2m £133.4m
£173.6m
90 60 30 0 2011
2012
2013
2014
2015
2016
ADDED-VALUE
30
CONNECTING PARTNERS CMS Distribution’s experienced IN-HOUSE MARKETING TEAM pride themselves on providing that personal touch for reseller and vendor partners.
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ringing customers and vendors together is a key way of forging new business relationships, finding new growth opportunities and getting a hands-on feel for technology. And this collaborative way of doing business is a key focus for the 10-strong marketing team at CMS Distribution, with its event portfolio expanding to connect even more businesses. “We are different to other teams, because we do everything in-house from video production to pressrelease writing and full digital marketing campaigns,” explains Julia Johansson, Marketing Director at CMS Distribution. “We take huge pride in what we do and the results we generate for our partners and customers.” Our marketing team has an indepth understanding of our customer goals, the technologies
and the market itself, and we can create highly-effective and creative communications for the right audience to deliver against KPIs and business plans. “We are always trying to make our offerings even more effective,” said Johansson, “Whether this is implementing new tools, completing training courses or renewing processes and systems already in place. And we consistently achieve results above industry standards.” CMS’ marketing team is also awardwinning, scooping the Marketing Team of the Year at the Storage Awards for the second year running in 2016. But it is the events that really stand out for CMS. The team organise two Partner Forum events for B2B customers in London and Ireland, and have recently launched a consumerfocused event.
“
Our entrepreneurial approach solves problems and creates opportunities."
- Julia Johansson, Marketing Director
2016 Storage Awards Storage Marketing Team of the Year At each one there are over 150 networking sessions taking place in the afternoon, giving customers the chance to ‘speed-date’ with new vendors and find out about new business opportunities. The events have been fine-tuned over the years, giving attendees the perfect mix of keynote presentations and one-on-one meetings to ensure they are fully up to speed on market developments.
ADDED-VALUE
We always assess the success of our marketing campaigns by analysing the metrics and we never stop looking to improve our marketing services because we are driven by results.
We create bespoke marketing plans that align with the overall business plan for both new and existing vendors.
STRATEGY & PLANNING
ANALYTICS & FULL REPORTING
CHANNEL & END-USER
LEAD TRACKING & MANAGEMENT
EFFECTIVE TARGETED MESSAGES
MARKETING SERVICES
They are never lost or forgotten. Leads are nurtured and distributed at the right time, generating new business.
Our experienced creative team is able to create targeted online, print and video messages to meet the needs of our partners.
LEAD GENERATION
We provide highly effective strategies to generate qualified leads for your business. We deliver the following:
+ Content marketing campaigns
+ Digital and print advertising campaigns
Physical and virtual events
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ADDED-VALUE
WE CONTINUOUSLY SEEK TO IMPROVE OUR EFFICIENCY
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cale is definitely the name of the game when it comes to CMS Distribution’s operations as the company continues to expand. The central UK logistics centre has increased to nearly 60,000 sq ft and has been strengthened by investment in IT, mobilisers, handling equipment, a centralised training centre and portal to maintain an excellent level of customer service. A new European logistics centre has also been opened in central Holland to serve Benelux, France and
2016 KEY FIGURES:
12M UNITS SHIPPED
250,000 ORDERS
24,000 NAS SOLUTIONS BUILT
Germany-based customers, along with satellite operations in Ireland and Spain. “Further investment has gone into expanding the Asia Pacific region this year, where we are working closely with customers in all of the major territories”, said Paul Roughley, Group Operations Director. CMS Distribution delivered to over 3,000 customers in 2016, hitting a 99 per cent next day delivery with an improved cost-to-serve model. Group stocks exceed £35m, with stock turn
of 18 times, while guaranteeing nextday delivery for all orders received by 6pm. “We are proud of our achievements and growth over the last year, which has seen double run-rate, and the fact that our flexibility to deliver customised solutions to a growing customer base remains. The next 12 months are set to be just as exciting and rewarding,“ added Roughley.
OUR VENDORS:
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NOTES:
Hi, my name is Chip and I’m excited to be CMS’ mascot. I’ll be your guide, sharing #LifeAtCMS spirit. If you see me, say hello or take a selfie. And… follow me @LifeAtCMS.
IRELAND
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SOFTWARE: +44 20 8805 1000
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www.cmsdistribution.com