financial report and registration document 2011 - Groupe SEB

policy (monitored by a Steering Committee) are put in place to ensure that
systems are fully reliable, secure and accessible. Regular investments are
made to improve the Business Continuity Plan in case of a major disaster
on the primary IT processing centre. Anti-hacking audits are carried out
each year to identify any security loopholes in the Group’s network. Lastly,
the management rules for access rights to systems are audited and then
updated on a regular basis.
LABOUR RELATIONS RISKS
Groupe SEB is constantly adapting its structures, particularly its industrial
base, to ensure that it remains competitive. Despite a responsible approach
to restructuring, plant closures remain a serious and disagreeable task
which can affect the quality of relations between management, employees
and labour unions, and which could have repercussions on the Group’s
operations, performance and results.
Over the past few years, Groupe SEB has carried out several industrial
restructuring plans in France and elsewhere, featuring site closures and
downsizing which led to job losses. These operations have had a disruptive
effect on the Group’s trading activity, but it has endeavoured to complete
them fully in keeping with its ethical values. The Group has put in place
substantial and often costly resources to ensure a solution for every employee
concerned: measures such as internal mobility, help with personal projects,
assistance with external re-employment, age-related measures, or long-term
training schemes meant that the vast majority of employees succeeded in
fi nding a solution. In most cases, the Group has also managed to ensure the
re-industrialisation of the employment zones involved by helping to identify
new operators and support the set-up of business activities to create jobs
at the sites concerned.
The Group gives high priority to the quality of on-going dialogue with
employee representatives to solve diffi cult labour issues responsibly and in
the best possible conditions for everyone.
RISKS RELATING TO ACQUISITIONS
Over the last 40 years, while pursuing its leadership strategy, Groupe SEB
has alternated its development through organic growth and acquisitions.
Today, it continues to play a key active role in consolidating the stillfragmented
Small Domestic Equipment sector.
Dependency risks
DEPENDENCE ON SUPPLIERS
As part of its policy of bulk buying, Groupe SEB relies on an approved
panel of suppliers for production (365 in 2011 versus 330 in 2010), which
accounted for approximately 88% of its worldwide needs last year. Excluding
outsourcing, the top 50 suppliers accounted for 52% of direct production
purchases in value (50% in 2010). With respect to purchases of fi nished
products, Groupe SEB has drawn up a panel of 50 suppliers who account for
78% of total purchases (73% in 2010); the top 15 suppliers alone accounting
for 68% of the total value of these purchases.
Financial Report and Registration Document 2011
1
Presentation of the Group
Risk management
External growth requires an ability to merge new acquisitions effectively and
generate synergies. With its many acquisitions over the years, Groupe SEB
has built up experience in integrating newly acquired companies. Having
integrated Moulinex-Krups in 2001-2002, it acquired All-Clad in the United
States in 2004, Panex in Brazil and Lagostina in Italy in 2005 and Mirro
WearEver in the United States in 2006. It went on to take majority control
of the Chinese company Supor at the end of 2007. This latest operation
stands out because of the major challenges it presents: separation both in
terms of distance and culture, language barrier, more complex integration,
coordination of communications between two listed companies, harnessing
synergies, etc. Coordinated by a Steering Committee and organised into
specific projects involving both Chinese and Western employees, the
integration has been carried out under good terms. The technology transfers
and synergies identifi ed were implemented, on the whole, by the deadlines
that had been set. In December 2011, Groupe SEB acquired an additional
20% stake in Supor, bolstering the initial long-term investment made but
not affecting the effective control or collaboration between Groupe SEB
and Supor.
Furthermore, in February 2011 the Group acquired Imusa, a Colombian
cookware company. Integration of Imusa has progressed rapidly, at
an exemplary pace, with strong support from the Group’s pre-existing
subsidiary, Groupe SEB Colombia. In May 2011, the Group took control of
a Vietnamese company – Asia Fan – specialising in the production and sale
of fans, and in December it took control of an Indian company – Maharaja
Whiteline – specialising in small domestic appliances. These companies are
not yet equipped with highly-developed structures or tools that meet the
Group’s standards in respect of information systems, reporting, auditing,
safety and security, etc. Because of this, even if the amounts in question are
currently insignifi cant, integration is a key issue and a focus of the Group.
Success is never guaranteed from the outset and may depend on external
factors, even with every effort and the allocation of resources to the
integration process. Regular monitoring of progress on projects and of
synergies implemented by an Integration Committee limits the risk of failure
and allows the Group to refocus its actions in the event of delays. Groupe
SEB implements this approach consistently to optimise the integration of
recently acquired companies.
On the basis of the 2011 fi gures, the top three production suppliers each
account for 2-3% of the total amount of purchases (3% each in 2010), the top
three suppliers of fi nished products account for around 33% of the total (30%
in 2010), with the largest representing around 23% alone (20% in 2010),
and the second and third each representing 5% (unchanged from 2010).
Excluding the leading supplier, the low numbers of the next-in-line show
that the Group’s policy of optimising purchasing procedures (in particular
procuring from a smaller number of suppliers) did not result in concentration
of risks. The Group is effectively dependent on external suppliers, where a
late service or delivery or even bankruptcy could be highly prejudicial to its
GROUPE SEB
1
15