Nordic Region
Market strengths - DT Group is a leading retailer and distributor of building materials in the fragmented Nordic markets. Stark and Beijer are market leaders in Denmark and Sweden respectively, while Starkki is the second largest brand in Finland. The business has a well placed branch network and a strong and experienced management team who have been responsible for driving capital efficiency and establishing strong working capital management, which has been adopted as a “best practice” in other segments of the Group.
Market opportunity - The markets in which the DT Group operates are fragmented and the medium term outlook for the region is expected to be positive. We expect to see strong growth opportunities to further consolidate DT’s leading market positions and benefit from its operational leverage once the market recovers. We intend to make selective bolt-on acquisitions in this region and to grow the business organically by using new formats and expanding its product range.
Wolseley France
Market strengths - Brossette is the second largest distributor of plumbing and heating equipment in France while the Heavyside business (main brand Reseau Pro) is the number two integrated distributor of building materials in France. The business also has an active presence in the French timber and timber-derived products markets with its major brand Silverwood. The French business has an experienced management team, who have led the recent implementation of a new distribution network, and back office rationalisation.
Market opportunity - The French construction market remains an attractive market for the Group to continue to focus on, being the second largest in Europe. We have completed our review of the lightside business (Brossette), and management are in the process of repositioning the business around the heating and renewable energy segments. We believe that opportunities remain to further consolidate the branch network and focus on larger branches, and the priority for the business is to complete its restructuring and repositioning, including selective disposals of non-core operations. Until this restructuring is completed, and a sufficient return on capital is generated, no further growth investment will be made.
More information about Our Nordic and French businesses.
Central and Eastern Europe
The review to determine the future strategy for the Lightside businesses in Central and Eastern Europe (CEE) has now been completed. We believe that for the foreseeable future market conditions across the CEE region will remain very challenging. Despite this, we have concluded that there remains significant potential to create long term value by focusing on a core of the constituent businesses in CEE as these economies emerge from recession. In particular, we have determined to focus on those countries where we have built sufficient scale, established leading market positions and can deliver an appropriate financial return.
We have decided to retain a Lightside presence in Switzerland, Austria, Luxembourg, Denmark, Holland and Italy. These businesses operate in markets which we believe have attractive long term market characteristics and will continue to be managed to ensure they fully capitalise on their leading market positions in these territories.