Logistics Contract Portfolio Supports Hays Performance
Hays Logistics’ strong portfolio of contract renewals and new business gains across Europe helped Hays plc to achieve a solid performance in a difficult market during the period July 1st 2001 to June 30th 2002. (10/1/2002)
Alcatel, Carrefour, France Telecom, Marks & Spencer, Orange, Sainsbury’s, Sara Lee, Scottish Courage, Siemens and Waitrose are just some of the many household names who have either renewed or awarded new contracts – together worth hundreds of millions of pounds – to Hays Logistics during the financial year.
Despite the difficult distribution market, Hays Logistics’ turnover remained stable at £880.2 million (£880.9m) and for the second year running accounted for over 36 per cent of its parent’s turnover of £2,434.4 million (£2,430.1m). Logistic’s margins of 5.2 per cent provided an operating profit of £45.7 million, 18.5 per cent of Hays plc’s £247.3 million operating profit, and a return of 14.6 per cent on operating assets.
In the last year Hays held its pole position in the FMCG third party logistics (3pl) distribution sector and continued to aggressively develop other outsourcing services, such as Returnable Transit Packaging (RTP) plus the management of non-merchandise goods such as point-of-sale equipment, shopping trolleys and consumable items.
Hays also continued to build its presence within the Technology sector. It handles about 60 per cent of the UK’s mobile phones: receiving, kitting, SIM-coding, hot-staging, distributing and managing the returns and repair processes for phones of almost every mobile handset manufacturer.
Its work for brands like Orange, T-Mobile and Virgin has not only led to contract renewals but has encouraged overseas companies like France Telecom to appoint Hays to manage part of the logistics for Orange SA.
The company’s portfolio of parts management activities was also further developed. These range from managing pan-European vehicle component requirements for Iveco through to the collection, consolidation, picking, packing and delivery of state-of-the-art technology to service engineers or installation sites for Alcatel, Cisco, Nortel and Siemens.
Xavier Urbain, executive director of Logistics, said, “The year has been very solid, with outstanding cash generation and a net debt reduction of £89 million across the group. We are very focussed upon our target markets, moving away from non-core commodity business and continuing organic investment.
“We continue to invest heavily in our resources and their development – for example, over £1 million in SAP, over £3 million with Orange and our Technology centre, £25 million in DCs in the Netherlands, and £10 million in a new Iveco DC in Spain – and soon we will be in a position to talk more about exciting investment and development in the USA.”
