Belron s.a. - D'Ieteren

30 | ANNUAL REPORT 2009 | BELRON S.A.Belron.Transforming obstaclesinto opportunities.

ANNUAL REPORT 2009 | BELRON S.A. | 31“Like most other businesses, Belronfaced many challenges at the startof 2009 due to the global economicenvironment. The response ourbusiness has made to these challengeshas been excellent. I am particularlypleased with the success of therepair led advertising campaignswhich have enabled us to delivergreater value to our customers in anenvironmentally responsible way.We continue to invest in a rangeof initiatives including a customerdelight acceleration programmewhich further enhance the servicethat we provide to the motorists andthe insurance and fleet industriesaround the world.”BELRON S.A.Gary Lubner, CEO Belron.

32 | ANNUAL REPORT 2009 | BELRON S.A.Measuring customerdelight.Belron has always been committed to delighting itscustomers with the service it provides. In 2009, the companyinitiated a customer delight acceleration programme inorder to drive further progress in this area. As part of thisprogramme, it completed the worldwide implementationof a new customer delight measurement approach basedon the Net Promoter Score (NPS). NPS is a measure ofcustomer loyalty and is calculated using the answers toone simple question which is whether customers wouldrecommend Belron to their friends or colleagues.PETER ROHRS:“The Belron team completed theglobal implementation of thenew NPS measurement systemin less than 12 months and I amincredibly proud not only of thecore team but everyone in thebusiness who have helped tomake this happen.The implementation has been amajor success and is facilitatingfurther improvements in ourcustomer service. Significantimprovements are already beingmade and everywhere I go peopleare talking about the feedbackfrom their customers gainedthrough the NPS approach andhow it is not only improving theway we serve our customers butalso changing the behaviour ofour own people.”Peter Rohrs, Head of Operations Service Delivery and Belron’s Customer DelightAcceleration Programme.

ANNUAL REPORT 2009 | BELRON S.A. | 33BELRON S.A.

34 | ANNUAL REPORT 2009 | BELRON S.A.Key figures.External sales up 12%, comprising 9% organic growth, due to favourable winter weather conditionsand successful marketing and operational activities, and acquired growth of 3%. | Currentoperating result up 23.9% to EUR 215.5 million driven by sales growth and strong cost control. |Current result before tax, group's share, up 38.5% to EUR 150.4 million (up 33.2% excluding theadditional interest acquired in Belron). | Acquired growth mainly in the US where integration of2008 acquisitions is complete. | Continued organic sales growth anticipated in 2010.FINANCIAL HIGHLIGHTS(EUR million) 2009 2008 CHANGEExternal sales 2,423.2 2,156.1 12.4%Current operating result 215.5 173.9 23.9%Current operating margin 8.9% 8.1% –Current net finance costs -28.5 -33.6 15.2%Current result before tax 187.0 140.3 33.3%Current result before tax, group’s share 150.4 108.6 38.5%Unusual items and re-measurements,before tax-5.8 -27.5 _Note: the average shareholding used for consolidation of the current result before tax of Belron in 2009 is 80.43% (77.38% in 2008).GEOGRAPHICAL SALES BREAKDOWN 143%57%> A job is completed every 3 seconds> 8,400 windscreens are repaired every day> 109,000 mobile jobs are completed every weekGEOGRAPHICAL SALES EVOLUTION 1 CHANGE● Europe:12%Austria, Belgium, Denmark, France, Germany, Greece, Ireland,Italy, Luxemburg, Netherlands, Norway, Portugal, Spain,Sweden, Switzerland, UK● Rest of the world:Australia, Brazil, Canada, New Zealand, United States 14%INDICATORS 2009 2008Total jobs (in million) 10.7 9.4> repair jobs 3.1 2.3> mobile jobs 5.7 4.9Mobile fleet (number of vans) 8,565 7,878Employees 22,399 20,8331. At actual exchange rate.

ANNUAL REPORT 2009 | BELRON S.A. | 35Key events 2009.APRIL. | 01 | Belron signs agreementwith franchise in Chile and opens itsfirst branch in Santiago. JUNE. | 02 |Franchise agreements signed in Finlandand Lithuania. | 03 | Autoglass UKwins prestigious award in UK’s top TVadvertising awards. The award was in thecategory of ‘Best use of TV for response’at the Thinkbox TV Planning Awards.AUGUST. | 04 | Belron US opens anew distribution centre in Ontario,California, which is strongly influenced byenvironmental design principles. | 05 |Belron employees from 18 businessunits compete in the London Triathlonand raise EUR 500,000 for MaAfrikaTikkun. The money will help to supportvulnerable children in South Africa givingthem vital care and the skills needed tosucceed in life.SEPTEMBER. | 06 | Belron enters theChinese market by acquiring a vehicleglass repair and replacement businessoperating in the city of Qingdao.| 07 | Belron strengthens its presence inthe USA by acquiring Auto Glass Centerbusiness in mid-west.OCTOBER. | 08 | Carglass Belgiumpresented with the prestigious AmbiorixPrize by the Prime minister. This annualaward recognises a profitable company,excelling in entrepreneurship andemployee engagement. | Carglass Spainwins silver at the EFI − or ‘effectiveness’Awards − competing against twenty-sixinternationally-known brands in thecategory of ‘Most Effective CommunicationsCampaign in the Spanish Media’.NOVEMBER. | 09 | Belron completesworld-wide implementation of NetPromoter Score, its new measure ofcustomer delight. | Belron wins ‘Team ofthe Year’ at the European Supply ChainExcellence Awards. | 10 | CustomerRelationship Management Associationpresents Carglass Netherlands with anaward for its total focus throughoutthe organisation on delivering excellentservice to its customers.0103050702040608BELRON S.A.0910

36 | ANNUAL REPORT 2009 | BELRON S.A.Taking advantageof the crisis.Current result before tax, group's share:EUR 150.4 million, up 38.5% * driven byexceptional organic sales growth – fuelledby weather conditions and successfulmarketing activities – and strong costcontrol.Activities and resultsSales grew by 12.4% to EUR 2,423.2 million,consisting of 9% organic and 3% fromacquisitions with a minimal currencytranslation impact. The organic growthwas due to favourable winter weatherconditions in the major Europeancountries, additional advertising andoperational improvements. Thesefactors together offset the impact ofthe challenging economic environment.There was minimal currency impact witha stronger US dollar offsetting weakercurrencies elsewhere, most notably the GBpound and Australian dollar. Total repairand replacement jobs grew by 14% to10.7 million.business to grow despite challengingmarket conditions. The acquired growthis primarily due to the acquisition ofDiamond Glass Inc. which was effectivefrom the beginning of July 2008.Current result before tax, group’s share,rose by 38.5% to EUR 150.4 million (2008:EUR 108.6 million).During the second quarter of 2009,Belron paid dividends relating to 2007and 2008 profits of EUR 97.5 million to itsshareholders, of which D’Ieteren’s sharewas EUR 75.4 million.In Europe, after both acquisitions andcurrency translation, sales growth was12% which consisted of 13% organicgrowth and 1% acquired growth offsetby an adverse currency impact of 2% dueto a weaker GB pound. The Europeanbusinesses benefited from favourablewinter weather conditions compared to2008. The sales growth was also deliveredthrough increased marketing activities,by maintaining close relationshipswith key accounts and by operationalimprovements. The acquisition growth ispredominantly due to an acquisition inDenmark in late 2008.Outside Europe, after both acquisitionsand currency translation, sales growthamounted to 14%. This consisted of 4%organic growth, 7% acquired growth and3% from currency translation. The organicgrowth reflects a continued investmentin marketing activities and key accountrelationships which have enabled theThe current operating result amountedto EUR 215.5 million (2008: EUR 173.9 million).The increase in operating result islargely attributed to sales increases acrossthe portfolio of businesses together withoperational efficiency gains and costreductions in many areas.Unusual costs before tax were EUR 4.7 millionand relate to the restructuring of USacquisitions. Re-measurements include theamortization of intangibles resulting fromacquisitions and changes in the fair valueof derivatives.Net finance costs were EUR 27.4 million(2008: EUR 38.1 million). Beforere-measurements resulting from thechanges in the fair value of derivatives,current net finance costs decreasedfrom EUR 33.6 million in 2008 toEUR 28.5 million due to lower borro wingsand reducing interest rates.Key developmentsBelron continued to pursue its goal ofdelivering an unrivalled service to itscustomers, key insurer and fleet partnersthereby delivering sales growth. Duringthe year a new centralised measurementprocess was rolled out worldwide forcollecting and evaluating customerfeedback which has made the groupeven more responsive to its customers’needs. In addition, the group continuedto pursue more efficient and effectiverelationships with its insurer and fleetpartners. The business also completedthe roll out of its standardised internetpresence.The business has further developed androlled out new tools and processes toensure that the work it performs is to thehighest standard. In the summer Belronopened its largest distribution centre,* Up 33.2% excluding the additional interest acquired in Belron.

ANNUAL REPORT 2009 | BELRON S.A. | 37located on the west coast of America. Thisfacility enables Belron to provide a betterservice to its customers whilst significantlyreducing mileage travelled. In recognitionof this, the Belron Supply Chain team wona Supply Chain Excellence Award in the‘best team’ category. This was the secondsuccessive year that the Belron SupplyChain team has won a Supply ChainExcellence Award.Television marketing was increased inmany countries following successful trailsin the previous year. The adverts followeda standardised approach and wereshown in conjunction with existing radioadvertising.During the third quarter Belron acquired asingle branch business in China and at theend of September the US VGRR businessof IGD Industries was acquired. Earlier inthe year franchise agreements were signedin Chile, Finland and Lithuania. In January2010 Belron acquired its former franchiseein Turkey.Outlook 2010The outlook for 2010 is for continuedorganic sales growth. Belron remainscommitted to delivering outstandingservice to its customers, its insuranceand fleet partners, and improving itsoperational efficiency.New distribution center. Belron continuedto focus on the transformation of its recentlyacquired US businesses during 2009. Onemajor component of this transformationprogramme is the enhancement of thesupply chain, notably the logistics function.As part of this programme, Belron USopened a new distribution centre inOntario, California, in August 2009. This26,200 square metre facility will supportthe enhanced distribution of glass tothe states west of the Mississippi Riverand is the largest in the Belron group. Ithas storage for 120,000 windscreens and30,000 other vehicle glass parts and willhandle over one million windscreensduring its first year. The new facility willenable Belron US to serve its customersfaster than ever before.It was developed using Belron globalbest practice and learnings from otherfacilities across the group, includingthe racking layout which was designedusing Belron best practice warehousemodeling. In addition, the opening ofthis new distribution centre reflects theBelron environmental commitmentas it will eliminate one million miles intransport and reduce the primary carbonfootprint of the US business by more than1,500 tons of CO 2. It incorporates manyother ecologically-friendly innovations likecompact fluorescent T5 lighting, whichis three to four times more efficient thanstandard fluorescent bulbs; motion anddaylight sensors that illuminate only whenneeded; skylights that allow for naturalsunlight; and an all-electric mobile fleet.With the continued growth of theUS business the new centre will ensureunrivalled availability of glass for itscustomers.BELRON S.A.

38 | ANNUAL REPORT 2009 | BELRON S.A.Let's not wait for the worldto change. Let's change it.Belron is highly committed to operatingin an environmentally responsible way.The company also completed a vehicletrial in Germany to assess the viability ofusing hybrid vans for local deliveries.OUR BUILDINGSThe primary method by which this isachieved is through the Belron repairphilosophy which is not only loweringcosts but also significantly reducing thenumber of windscreens that need replacing.Belron actively promotes the repair ofwindscreens through its advertising andjoint promotional activities with its keyinsurance and fleet partners. Repairinga windscreen before it needs replacinggenerates significantly less waste and hasa carbon footprint around 10 times lessthan fitting a replacement screen.In addition to driving repairs, Belron alsofocuses on reducing the environmentalimpact of repairing or replacing vehicleglass in many other ways. By using its callcentres or booking on-line the companyroutinely reduces the number of trips acustomer would make. Belron’s effectiveroute planning systems means theroutes that are taken are optimised tobe the most efficient, thus eliminatingunnecessary mileage and tailpipeemissions. The company also managesthe emissions from its fleet, the energyused in its buildings and the recycling ofits products at the end of life. It is alsoworking with its supply chain to eliminatepackaging waste and distributionemissions.OUR FLEETOver the course of 2009 Belron has madesome significant changes to the way itmanages its fleet emissions. Scootershave been adopted as a way of loweringtailpipe emissions in cities includingParis and Brussels and at the same timehave delivered a more efficient servicein traffic heavy locations. In CarglassBelgium the rollout of an e-positive drivertraining programme to all technicians sawemissions reduce overall by 2%. In the USbusiness the “Idling Gets you Nowhere”, aprogramme which encourages techniciansto switch off their engines when notdriving, has realised savings of over30,000 metric tons of CO 2. Additionally,in the US, Belron has begun investigatingthe use of trains in the supply chain(historically not done due to fear of highbreakage) and started using trains forinternal shipments within the US.During the year, a wide range of initiativeshave been implemented to reduceelectricity usage in the buildings. In Italyand Belgium Belron is currently replacingfluorescent light signage with LEDequivalents which will reduce wasteas well as emissions. Carglass Germanyhas achieved significant cost and CO 2savings by introducing simple measuressuch as installing time switches for coffeemachines, water dispensers and glass shopshelves. Carglass Netherlands eliminatedthe need for two large air conditionersin their contact centre through applyingsolar films to windows and substitutingindividual PCs with dumb terminals.In the supply chain Belron reducedthe transport miles associated withdistributing glass across the US by openingits second Distribution Centre (DC) inthe USA.WASTE AND RECYCLINGBelron repaired nearly three million windscreensduring the year, a 30% increaseon 2008. This meant that over 4,900 tonsof waste was not produced and 12,000tons less CO 2was emitted as a result. Inaddition, when a vehicle’s glass needs tobe replaced, 74% of all the business unitsnow recycle the glass they replace. Belronis aiming to push this rate even higher inthe coming year.

ANNUAL REPORT 2009 | BELRON S.A. | 39Accurate accounting of its carbonemissions is a key element of effectiveemissions reduction strategies. Over thepast year Belron has worked to improvethe group-wide tracking tool to enablethe company to better capture, measureand monitor its global emissions.At the end of 2009 Belron has startedthe process for conducting supplieraudits to monitor the environmental andCorporate Social Responsibility (CSR)policies of its suppliers.Community Initiatives Programme.Employees in New Zealand participatedin the Auckland Marathon. The majorcharities supported were the ChildCancer Foundation and the NZ HeartFoundation.BELRON S.A.During 2009 the company began workingwith a key supplier to understand productpackaging and identified solutions to reducewaste from plastic packaging by 50%.Most of the DC’s now recycle cardboardwhich is extensively used throughoutthe supply chain. In addition Belron iscurrently working on the design of a newreusable, collapsible crate to transportglass. This new design would eliminate theneed to use wood in the supply chain.THE WAY WE WORKBelron knows that building a cultureof responsibility begins with the way thatit works as a business. 2009 has seen thecompany further embracing what it cando to make a difference. It has set itselfa tough challenge to grow the businesswithout growing the CO 2emissions. Justsome of the ways it knows it can achievethis will be by improving its buildings,making changes to its fleet and makinggreater use of renewable energy.It is also about making changes to theway it works.A number of business units have madechanges to their company car policiesand implemented full scale recyclingpolicies across buildings. Driver awarenessprogrammes have also been introduced insome of the business units to reduce idletime thus reducing CO 2emissions.The implementation of ISO14001 inLaddaw, the UK distribution business is anexample of step change thinking in thisarea with the whole business adoptinga more sustainable approach to the waythey operate.OUR COMMUNITIESBelron is convinced that supportingpeople beyond its business is theright thing to do and so all the businessunits are encouraged to be involved incommunity activities either at a local,national or global level.Belron’s global support was again focussedon its corporate entry into the LondonTriathlon. The company entered a recordnumber of participants − over 600 individualsfrom 18 business units took partin the event in August raising in excess ofEUR 500,000 for MaAfrika Tikkun.These funds have gone directly to supporta range of programmes dedicated toimproving the life prospects of Africanchildren and young people and the familiesand communities that care for them.In addition to financial support theNetherlands cleaned up and sent on toMaAfrika Tikkun 65 redundant computers.The dominant theme for many of thebusiness units is to provide support tocharities involved with children. Someexamples include Carglass Greece whichsupports an organization called Hamogelotou Paidiou that helps improve the lives ofabused children and orphans. Employeesat Carglass Germany have furtherdeveloped their relationship with staffand patients at the Kinderkrankenhauschildren’s hospital. Their donations since2007 have paid for important after careand provided more hospital staff tosupport children and their parents athome. A team from O’Brien in Australiatook part in the Sydney Running Festivalrecently as part of their ‘Giving Back’Disaster relief has also played a prominentrole in Belron’s giving back approachin 2009. Its Australian business O’Brienhas been supporting individuals andcommunities affected by the Victorianbushfires through the establishmentof the Employee Bushfire Appeal. Thecompany has been matching everyemployee contribution to the AustralianRed Cross. Employees at Carglass Italy rosemoney to help young people affected bythe Abruzzo earthquake which hit Italyearlier this year.