carl hoyer - competition

CXP Analyst and Investor Meeting Denver – 12-13 September 2007

12th of September

Carl Hoyer - Competition

2CXP Analyst and Investor Meeting Denver – 12-13 September 2007 2

“Safe Harbour” Statementunder the Private Securities Litigation Reform Act of 1995

Statements included in this press release, which are not historical facts are forward-looking

statements made pursuant to the safe harbour provisions of the Private Securities Litigation

Reform Act of 1995 and the Securities Exchange Act of 1934.

Such forward-looking statements are made based upon management’s expectations and

beliefs concerning future events impacting Corporate Express and therefore involve a

number of uncertainties and risks, including, but not limited to industry conditions,

changes in product supply, pricing and customer demand, competition, risks in integrating

new businesses, currency fluctuations, and the other risks described from time to time in the

Company’s filings with the US Securities and Exchange Commission, including the

Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission

on March 9, 2007. As a result, the actual results of operations or financial conditions of the

Company could differ materially from those expressed or implied in such forward-looking

statements. Shareholders and other readers are cautioned not to place undue reliance on

these forward-looking statements, which speak only as of the date on which they are made.

The Company undertakes no obligation to update publicly or revise any forward-looking

statements.

3CXP Analyst and Investor Meeting Denver – 12-13 September 2007

Market Environment

DIRECT MAIL

Limited Offering

RETAIL

Physical PresenceLease obligation

Staples

Office Max

Office Depot

CONTRACTWide range / consumables

Next Day Delivery


Market Environment

Wide range / consumables

Next Day Delivery

CONTRACT DIRECT MAIL

Limited Offering

RETAIL

Physical PresenceLease obligation

Corporate Express

Lyreco

Local / regional players Local / regional players Supermarkets

Independent retailersWholesalers


Single Accountable Source for Business Needs

Single-source-supplier

Office Products

Furniture Doc & Print Management

CE Promotional Marketing

Facility Supplies

OP North America

OP Australia

OP Europe

√

√

√

√

no

√

√

√

√

√

√

√

√

√

√

√

√

√

Educational Supplies

Corporate Express


Single Accountable Source for Business Needs

Single-source-supplier

Office Products

Furniture Doc & Print Management

CE Promotional Marketing

Facility Supplies

Office Max

Staples

Office Depot

Local players

√

√

√

√

no

no

√

no

no

no

no

no

some

no

no

no

no

no

no

no


North AmericaCorporate Express

Office MaxOffice Depot

Staples

EuropeCorporate Express

Office DepotLyreco

Staples (solely mail order)

Australia & New ZealandCorporate Express

Office MaxLyreco

Southeast AsiaCorporate Express - AlliancesOffice Depot - China/S Korea

Staples - S-Korea/India

Global Office Products - Global Coverage


Office Max

8

2005 2006 Q2 2007

Sales 9,128 8,966 2,133

Gross contribution 2,188 2,309 536

% of sales 24.0% 25.8% 25.1%

Operating profit 42 280 56

% of sales 0.5% 3.1% 2.6%

DIRECT MAIL RETAIL

Sales: 53%

CONTRACT

47%

Gross contribution: 46%

Operating profit: 67%

54%

33%


S ales s plit

74%

14%12% L arge

S oHo

Medium

9

Office Max - Contract

US, Canada, Australia and New Zealand• International sales 24% of total Contract (US$ 1.15 bln in 2006)

SoHo (<20 ftes), Commercial (20-249), Large (>250)Reliable, mail order company, active in US• Sales Reliable not disclosed

Sales growth: • No recent acquisitions• A$, C$ and NZ$ moved substantially vs US$ last years• Nowadays do disclose organic growth


Office Depot

10

2005 2006 Q2 2007

Sales 14,278 15,011 3,632

Gross contribution 4,392 4,668 1,102

% of sales 30.8% 31.1% 30.3%

Operating profit 347 * 733 154

% of sales 2.4% 4.9% 4.3%

DIRECT MAIL RETAIL

Sales: 30%

CONTRACT

45%

Gross contribution: ? ? ?

Operating profit *: 34%

? ? ?

44%

* Includes sizeable restructuring charge

* 2006 - USD 300 mln of overhead costs not allocated to divisions and additional USD 58 mln of one-of costs


Office Depot- Contract

‘Business Service Group’: • Contract sales, Mail order (Office Depot), Internet sales• Do not disclose breakdown, Contract should be larger than Mail order

Sales growth: • Acquired Allied in May 2006 (then US$ 300 mln in sales) • Also in ‘International Division’ number of acquisitions• No currency effect• Do not disclose organic growth

No breakdown / disclosure on Gross contribution


Staples

12

2005 2006 Q2 2007

Sales 16,079 18,161 4,290

Gross contribution 4,583 5,194 1,210

% of sales 28.5% 28.6% 28.2%

Operating profit 1,235 1,463 281

% of sales 7.7% 8.1% 6.5%

DIRECT MAIL RETAIL

Sales: 33%

CONTRACT

54%

Gross contribution: ? ? ?

Operating profit *: 38%

? ? ?

59%

* 2006/07 - USD 169 mln stock option costs not allocated to divisions


Staples- Contract

‘North America Delivery’: • SoHo (1-19 fte’s); Mail order (Quill, MAP)(10-100 fte’s)• Middle/large - SBA (>20 fte’s), Contract - SNA (Fortune 500)Sales growth: • Number of smaller acquisitions, partly announced• Acquired American Identity, promotional marketing company • Modest currency effect due to C$No breakdown / disclosure on Gross contribution• Mail order highly profitable, MAP should be over 20% operating margin


United Stationers / SP Richards

14

United Stationers 2005 2006 Q2 2007

Sales 4,348 4,547 1,141

Gross contribution 643 754 170

% of sales 14.8% 16.6% 14.9%


% of sales 3.9% 5.3% 4.1%

SP Richards 2005 2006 Q2 2007

Sales 1,662 1,780 431

Gross contribution n.a. n.a. n.a.

% of sales n.a. n.a. n.a.


% of sales * 9.5% 9.4% 8.7%

* Genuine Parts total overhead around 0.5% of sales


United Stationers

Over 80% volume small / regional players- Close to 50,000 sku’s on stock, delivery overnight- From item ordering to full service

Sweet Paper acquired in Q2 2005- Specialised in Facility products- Local /regional office product players too small to direct source


EBIT-margins top-4 players North American market

0.0%

3.0%

6.0%

9.0%

12.0%

Q1 04 Q3 04 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07

Corporate Express Office Max Office Depot ODP underlying Staples Staples underlying

OverheadCorporate Express EUR 7 mln per quarter (excludes pension income)Office Depot appr. USD 80 mln / quarterMethodology of overhead allocation was changed per Q1 05Office Max USD 10 mln in Q2 2007Staples No overhead, but USD 49 mln stock compensation

x

x

X – excludes special items ODP


-5%

0%

5%

10%

15%

20%

25%

Q4 04 Q2 05 Q4 05 Q2 06 Q4 06 Q2 07

CE NA Office Max Staples Office Depot

Organic growth top-4 US players


Closing remarks

Same industry, but• Different strategies

All channels vs single-source-supplier Global reach vs regional player

• Different customer mix

Disclosure• Best practice vs limited information

No divisional gross contribution No segment, customer and/or divisional breakdown No organic growth numbers No details acquired companies (e.g. sales)

Extrapolation• E.g. Office Depot - Sept 2004 profit warning on a.o. Hurricanes

Florida• E.g. Office Depot - Last Friday commenting on SME weakness• SME vs Large/strategic, blue-collar vs white-collar

CXP Analyst and Investor Meeting Denver – 12-13 September 2007

Productivity in your hands.

carl hoyer - competition

Documents