ECM.L Regulatory News (ECM)

PRELIMINARY STATEMENT

Electrocomponents plc, the world's leading high service distributor of electronics and maintenance products, today announces its results for the year ended 31 March 2012.

SUMMARY OF RESULTS

'Broad-based growth delivering record full year sales'.

(1) Underlying revenue growth, adjusting for currency and trading days

(2) 2012: includes 5p interim and 6.75p proposed final dividend

Financial Highlights

·; Broad-based underlying sales growth of 7%, with all regions delivering growth

·; Gross margin broadly stable through the year

·; Further cost leverage, with operating costs reducing by 0.3% points of sales

·; Profit before tax increasing by 7%, return on capital employed rising to 25%

·; Full year proposed dividend increased by 2% to 11.75p per share

·; Strong balance sheet, with net debt to EBITDA of 1.0x and successful £210m bank refinancing

Operational Highlights

·; International business growth of 9%, now contributing more than 70% of Group sales

·; UK performed well with sales growth of 3% and contribution growth of 4%

·; Electronics growth of 7%, outperforming the market, with over 30k products added

·; DesignSpark, the Group's online design tool, attracted over 1.2 million visitors since launch

·; Maintenance growth of 7% boosted by global strategic suppliers and expansion of European offer

·; eCommerce revenue growth of 18%, share of Group revenue of 54% up from 49% last year

·; Successfully installed new IT system in North America and upgraded systems in UK and Europe

CURRENT TRADING AND OUTLOOK

In the first seven weeks of the new financial year, the Group has delivered sales at a similar level to last year. The International business declined by 2% and the UK grew by 4%. Within International, Continental Europe declined by 1% and both North America and Asia Pacific declined by 3%.

Whilst we are mindful of economic conditions and recognise that comparatives will remain demanding during the first half of the new financial year, we believe that the Group is well placed to continue to take market share in international markets. Therefore we are continuing to invest to drive performance in the coming years.

IAN MASON, GROUP CHIEF EXECUTIVE, COMMENTED:

"The Group has delivered record full year sales of £1.3 billion, representing sales growth of 7% and building on the excellent progress we made last year. This growth is broad-based, with all regions and both electronics and maintenance performing well, and is being driven by the success of our eCommerce channel, which grew its revenues by 18% and accounted for over half of Group sales.

We are the leading global high service distributor operating in large and fragmented markets and we have continued to gain market share internationally. Each of our International regions grew by 9%. In addition, we have continued to deliver cost leverage.

With a strong business model, a proven strategy and a global infrastructure that has been strengthened following investment in our systems in North America, UK and Europe, we see significant long-term growth potential for the Group. We are recommending an increase in our final dividend of 4%."

Enquiries:

* Available to 15:00 on 24 May 2012, thereafter 01865 204000

The results and presentation to analysts are published on the corporate web site at www.electrocomponents.com

Note:

In order to reflect underlying business performance, comparisons of revenue between periods have been adjusted for exchange rates and the number of trading days (underlying revenue growth). Changes in profit, cash flow, debt and share related measures such as earnings per share are, unless otherwise stated, at reported exchange rates.

Notes to editors:

Electrocomponents plc is the world's leading high service distributor of electronics and maintenance products, with operations in 32 countries. Founded in 1937 the business is listed on the London Stock Exchange and employs around 6,300 people. Today, through our trading brands of RS and Allied, we offer more than 550,000 products through the internet, catalogues and at trade counters to over 1 million customers and have a market leading reputation for service excellence. Our products, sourced from 2,500 leading suppliers, include electronics, electrical, mechanical, automation and health and safety components.

The business satisfies the small quantity needs of its customers who are typically electronics or maintenance engineers in business. A large number of high quality goods are stocked, which are dispatched the same day that the order is received. The average customer order value is over £140 although the range of order values is wide. The Group's large numbers of customers come from a wide range of industry sectors with diverse product demands.

Overview and Strategy implementation

Market Overview

The global market opportunity available to the Group is large and growing over the cycle. We estimate that the value of the available market is around £30 billion globally, split evenly between electronics and maintenance products. The overall electronics market has on average grown at around twice the rate of GDP growth and the maintenance market at around GDP growth; both markets are growing faster in developing economies than in Europe and North America.

We operate in highly fragmented markets which are primarily served by a large number of small local and regional distributors. There are five international high service distributors, including Electrocomponents, which together have around 15% of the available global market. They are gaining market share from smaller distributors who are not able to match their broad product range, high customer service and eCommerce capabilities. Electrocomponents, through its brands of RS and Allied Electronics, is the number one high service distributor in the world. RS is the leading distributor in the UK, Europe and Asia Pacific, with Allied ranked third in the North American market.

Whilst we are not immune to the current challenging economic environment, we are well positioned compared to the numerous, smaller distributors against whom we primarily compete, who do not have the advantages of our global scale and reach. We will therefore continue to invest in our strategic priorities to leverage these competitive advantages, which will enable the Group to accelerate its market share gains over smaller competitors, as was the case during the previous cyclical downturn.

Strategy Implementation

Our strategy is focused on five core areas:

§ Focus on international markets

§ Develop our electronics and maintenance offers

§ Exploit the full potential of eCommerce

§ Leverage our global infrastructure and increase operating margins

§ Maintain UK profitability

Focus on International Markets

As a result of our focus on building our position in faster growing markets outside of the UK, we have grown the proportion of our revenues accounted for by International markets from 40% in 2000 to over 70% in 2012. Over the last ten years our International business has achieved average annual sales growth of 7%, around double the rate of average annual global GDP growth, as it gains market share from smaller distributors. We expect that International market share will continue to grow and our focus remains on delivering International sales growth of 7%-10% per annum over the medium term. In 2012 our International business delivered 9% revenue growth.

We have made good progress in our emerging markets during the year, with India generating revenue growth of almost 20% and Eastern Europe enjoying a successful first full year of operation.

The strong growth we have generated in our International business in recent years was recently recognised when we won the Queen's Award for Enterprise in the International Trade category.

Develop our Electronics and Maintenance Offers

Electronics and Maintenance have complementary growth and returns characteristics, and the combination generates both sales synergies, from the cross-selling opportunities, and cost synergies, as they leverage the same infrastructure.

Electronics

Our electronics portfolio represents 42% of Group sales, growing by 7% over the last year. During the year, RS introduced around 32,000 new electronics products from leading suppliers such as TE Connectivity, Panasonic, Microchip and ABB.

DesignSpark, our online gateway for resources for electronics engineers that was launched in the summer of 2010, has proved a major success, attracting more than 1.2 million visitors to date. In addition, DesignSpark PCB, our free online design tool for electronics engineers, has recorded over 130,000 downloads since its launch. These tools enable us to build a direct relationship with this customer segment and drive additional sales through this channel.

It is pleasing that the success we have had in developing our electronics offer over the past two years is being recognised in a number of supplier and industry awards, including Global High Service Distributor of the Year from TE Connectivity and Distributor of the Year 2011 at the Elektra European Electronics Industry awards.

Maintenance

Our maintenance portfolio represents 58% of Group sales and is a key differentiator versus our competition as we are the global high service distributor with the broadest range of automation and control, maintenance, repair and operations products. During the year, our maintenance sales grew by 7%, supported by 8,000 new product introductions into RS, benefitting from the programme to build a consistent maintenance offer across Europe and strong automation and control growth.

We continue to develop deeper relationships with our strategic suppliers, co-operating further on range development, joint marketing and sales activities, eCommerce development and customer transfers. During the year, sales of products from our strategic suppliers grew significantly faster than the overall business.

Exploit the Full Potential of eCommerce

eCommerce delivered 18% revenue growth during the year, growing significantly faster than our other sales channels, illustrating the success of our strategy to put eCommerce at the heart of our multi-channel sales and marketing approach. Across the regions, Asia Pacific delivered 32% eCommerce growth, Continental Europe 22%, North America 13% and the UK 11%. eCommerce generated 54% of Group revenues during the year, the first full financial year in which it has exceeded half of Group revenues, and we remain confident that it will continue to grow its share of Group sales over time to at least 70%, with markets such as Japan already reaching this level.

Our eCommerce channel offers considerable advantages over our traditional catalogue channel, allowing us to offer our customers flexible and targeted pricing, the ability to view 3D product models online, and the convenience of 24-hour purchasing from desktop PCs, laptops, smartphones and internet tablets. It also gives us an ability to reach customers locally at the point of need, and is vital for both market penetration and achieving further market share gains from smaller distributors.

We have continued to switch our marketing spend from catalogues to search engine marketing, and as a result we saw a 23% increase in our online traffic during the year. We will also continue to build on initiatives such as the new search and browse functionality and our online Live Chat service, which helps guide customers through their online journey and has boosted conversion rates, to enhance the competitive advantages that we have developed in this regard.

Leverage our Global Infrastructure and Increase Operating Margins

We have 17 distribution centres globally which enable us to provide our high service levels to countries representing around 90% of the world's GDP. We operate directly in 32 countries, with distributors in a further 37 countries. Having an international operating structure allows us to take advantage of economies of scale and achieve significant operating leverage.

As part of our evolution towards a global operating model, and in order to strengthen our infrastructure to support our international growth, we made significant investments during the year in our systems architecture. We successfully installed a new SAP system in North America, which will give this business a robust platform for long-term growth as well as deliver operational benefits. We also upgraded our existing SAP systems in the UK and Continental Europe, which will not only provide a stable platform for these regions until at least 2020, but will also provide a template from which SAP will be rolled out into Asia Pacific over the next two years, which is expected to be a key enabler of an acceleration in this region's growth rate over the medium term.

The UK is our largest individual market with a return on sales around 10% points higher than that of our International business, principally due to economies of scale. We are confident that as the International business grows it will deliver increasing operating leverage and close this gap on the UK. This was illustrated during the last year when these scale benefits outweighed continued investment in electronics and eCommerce initiatives to reduce the International business's operating costs as a percentage of sales by 0.9% points.

Maintain UK Profitability

The UK's strategy is focused on maintaining its leadership position in the high margin high service level business, leveraging the Group's improved customer offers and developing new incremental regular revenue streams. Gross margin, operating costs and cash continue to be managed effectively.

By consistently implementing this strategy the UK business has delivered sales and contribution growth since the 2008 recession, and it is now delivering a contribution that is 5% higher than its pre recession level.

Examples of the initiatives undertaken by the UK during the year to develop new incremental revenue streams include the targeting of machine and panel builders, a customer segment that has grown by more than double the region's overall growth rate following a successful sales and marketing campaign. The business has also continued to grow its corporate customer base, adding a further 13 corporate accounts during the year and taking the total number of corporate accounts to over 150, contributing around a quarter of the UK's sales.

OPERATING PERFORMANCE AND KEY PERFORMANCE INDICATORS

(1) 2012: includes 5p interim and 6.75p proposed final dividend

(2) Underlying revenue growth, adjusting for currency and trading days

(3) Operating profit expressed as a percentage of revenue

(4) Operating profit expressed as a percentage of net assets plus net debt

(5) Based upon EBITA: Earnings before interest, tax and amortisation (inc. government grants)

BUSINESS PERFORMANCE

Revenue

The Group delivered record annual revenues of £1,267.4m, representing underlying full-year sales growth of 7%. This performance was broad based, with all the Group's regions and both electronics and maintenance contributing to this growth, and is being driven by the continued development of the Group's industry-leading eCommerce channel, which grew revenues by 18% in the year. International sales growth was 9%, and within this each region grew by 9%, whilst sales growth in the UK was 3%. The Group continues to benefit from its balanced product offering, with both electronics (42% of Group sales) and maintenance (58% of Group sales) delivering similar growth rates of 7%.

Gross margin

Gross margin at 46.8% was broadly stable through the year. On a year-on-year basis the gross margin declined by 0.3% points, with the UK improving its gross margin by 1.0% point and International's gross margin reducing by 0.8% points.

Costs

Operating costs as a percentage of sales reduced by 0.3% points as the business delivered ongoing operating leverage. Operating costs, at constant foreign exchange, grew by 5.6% reflecting increased selling volumes, inflation and investment in sales and marketing initiatives to drive growth. These impacts were partially offset by cost reduction initiatives such as catalogue cost reductions of £4m, of which a significant proportion represents the deferral of the European catalogue into 2013. Following this deferral, we expect European marketing costs to increase by around £2m in the first half of 2013.

Profitability

Operating profits increased by 7% with return on sales being stable year on year. Foreign exchange movements increased reported operating profit growth by around 0.5% points principally due to the weakening of sterling against the euro during the year. A 10 cent weakening of the Euro and US Dollar currencies against Sterling reduces the Group's operating profit by around £6m and £2m respectively.

Return on capital employed increased by 0.4% points to 24.6%.

Profit before tax

Profit before tax was £122.3m, an increase of 7% over last year. All regions contributed to this increase with International contribution increasing by £14.5m (10%) and the UK increasing by £4.3m (4%). The contribution increase was partially offset by a rise of £10.5m (8%) in Process costs, reflecting increased variable costs associated with the strong International sales growth and continued investment in the implementation of the electronics and eCommerce strategies.

Earnings per share

Earnings per share of 19.5p increased by 8% year on year, with the effective tax rate remaining at 31%.

Dividend

The Board is proposing to recommend an increase of 4% in the final dividend for the year to 6.75p per share. This will be paid on 20 July 2012 to shareholders on the register on 22 June 2012. As a result, the total dividend for the financial year will increase by 2% to 11.75p per share, resulting in earnings dividend cover of 1.7 times.

The Board believes that the business has significant opportunities to invest for growth at attractive returns and will therefore ensure that the Group has adequate resources available to take advantage of these opportunities as they arise. Over time, and as earnings increase, the Board intends to continue to pursue a progressive dividend policy whilst increasing earnings dividend cover to around 2 times.

Cash flow

The Group's free cash flow for the year of £52.7m was £4.7m below the prior year's free cash flow. This decrease primarily reflected additional net capital expenditure of £15.9m during the year as the Group made significant investments in its systems in North America, UK and Continental Europe offset by an increase in the Group's profit before tax of £8.3m. Stock turn reduced slightly from 2.7 times to 2.6 times, reflecting the business's drive to maintain its high service levels compared to the smaller competitors and also to invest in additional stock to drive sales performance in its international markets, notably in Asia Pacific.

In 2013 we are planning to invest further in both stock and capital expenditure to drive sales growth. Capital expenditure in 2013 is likely to be in the region of £30m and is expected to include the first year's costs of a project to implement a new SAP-based ERP system in Asia Pacific. This project is expected to cost around £20m over the next two to three years and will bring this region onto the same systems platform as the UK and Continental Europe. We expect revenue costs of around £1m in 2013 related to this project. This investment will support the acceleration of Asia Pacific's growth rate, which is key to driving International sales growth of 7%-10% per annum over the medium term. Other areas of capital investment will include ongoing warehouse modifications to accommodate the increase in product range and further investment in the Group's eCommerce system architecture.

Financial position

At 31 March 2012 net debt was £154.2m, which was £6.5m lower than last year due to free cash flow of £52.7m exceeding dividend payments of £50.1m, with the balance of the movement largely being due to foreign exchange.

In July 2011 the Group signed a £210m syndicated multicurrency facility (currency split: US Dollars $75m, Sterling £120m, Euros €50m) from seven banks maturing in November 2015 which replaced the previous syndicated facility. The Group's other main source of finance is US Private Placement notes, comprising $65m with a June 2015 maturity and $85m with a June 2017 maturity. Taking the syndicated bank facility and US Private Placement notes together, the Group's committed debt facilities and loans amount to £300.6m, of which £128.3m was undrawn as at 31 March 2012.

Year end net debt comprised gross borrowings of £174.0m (currency split: £63m US Dollars, £57m Sterling, £49m Euros and the balance in other currencies) and financial assets of £19.8m. The currency mix is designed to help hedge the Group's translation exposures. The peak month-end net borrowing during the year (using monthly exchange rates) was £201.0m.

The Group's financial metrics remain strong with EBITA interest cover of 24.7 times and Net Debt to EBITDA of 1.0 times, with significant headroom to the Group's banking covenants.

INTERNATIONAL

(1) Adjusted for currency, revenue also adjusted for trading days

The International business represents over 70% of Group revenue and comprises three regions: Continental Europe (50% of the International business), North America (31%) and Asia Pacific (19%).

During the year, underlying revenue increased by 9% with each of Continental Europe, North America and Asia Pacific growing by the same rate. Gross margin was stable across the year, though year on year it declined by 0.8% points, with Continental Europe and Asia Pacific the key drivers of this decline. The gross margin was impacted by adverse foreign exchange movements (principally the movement of Sterling against the Euro), the successful growth of new revenue streams such as larger orders, together with growing sales to larger customers. The International business has delivered further ongoing cost leverage, with costs as a percentage of sales reducing by 0.9% points year on year. Underlying contribution increased by 9% year on year and the International contribution margin improved to 17.8%.

CONTINENTAL EUROPE

(1) Adjusted for currency, revenue also adjusted for trading days

Our business is the largest high service distributor of electronics and maintenance products in Continental Europe and comprises ten markets. The largest of these are France, Germany and Italy and the remaining businesses are Austria, Benelux, Eastern Europe (comprising Poland, the Czech Republic and Hungary), Ireland, Scandinavia, Spain and Switzerland.

Continental Europe reported strong underlying revenue growth of 9% and contribution growth of 8% at constant foreign exchange (10% as reported). The region continued to benefit from the regionalisation programme that was initiated in 2010, since when Continental Europe has delivered an average underlying annual sales growth rate of 15%, significantly ahead of the underlying market growth.

An example of the benefits of regionalisation, the strategy to build a large maintenance offer that is consistent across Europe, has delivered more than £10m in incremental revenue growth since the programme began in June 2010. A total of 70,000 products are now available in every market in the region, half of which are in the automation and control range, the primary technology focus in maintenance because of its potential for future revenue growth.

Our approach to eCommerce, which recognises the importance of the 'human touch', including for example the introduction of our online chat service Live Chat in France, is a key differentiator for the business. Our corporate sales force won 25 new accounts during the year (an increase of 10% in the number of corporate accounts) with our eCommerce solutions being a major contributor to this success. Across the region eCommerce sales grew by 22%, with an exit channel share of 64%, compared to 59% a year ago.

eCommerce has also been crucial in enabling us to successfully enter new markets in a cost-effective manner, and we have been pleased with the progress made in this regard in Eastern Europe and Switzerland during the last year.

Evidence of the ongoing progress made across the region also comes via a customer satisfaction survey conducted by TNS. The most recent survey, conducted in late 2011, saw an increase in our score whilst the benchmark average declined; testimony to the attractiveness and quality of our service and offer to customers.

NORTH AMERICA

(1) Adjusted for currency, revenue also adjusted for trading days

Allied, our North American business, reported underlying sales growth of 9% during the year, boosted by the business's continued focus on customer acquisition, expansion of the product range and targeted marketing campaigns. Excluding the additional revenue costs related to the implementation of a new system, the contribution growth was 7% at constant foreign exchange.

A major focus of the business, particularly in the second half of the year, was the installation of a SAP-based ERP system to replace a bespoke legacy system. This project, which incurred additional revenue costs of around £2m during the year, successfully went live in January 2012 and was both on time and within budget. Going forward, there will be additional depreciation and operating costs of around £2m per annum related to this project.

Sales and marketing activities are centred on the business's unique network of 53 sales offices. These included targeted joint sales and marketing customer calls and visits with suppliers which have resulted in customer numbers rising by around 5% over the year. eCommerce remains a key marketing channel, with eCommerce revenues growing by 13% during the year and channel share rising to 39% from 37% in the prior year.

During the year, Allied added a further 19,000 new products to its portfolio from existing suppliers such as Molex, TE Connectivity and Microchip as well as new suppliers such as ABB, Vishay and Panasonic. The fastest growing segment was automation and control, which benefited from targeted campaigns using both online and offline channels and which grew by over 20%. Allied's success in this product category over a number of years was rewarded by its recognition as a 'First Team' Honoree by Automation World, a leading publication for automation professionals in North America.

In the months following the new system go-live date the focus of the Allied team has been on system and process integration. As that period of learning for our staff draws to an end and a more pro-active approach to sales and marketing returns, we are confident that this new system will give the business a robust platform for long-term growth as well as delivering operational benefits.

ASIA PACIFIC

(1) Adjusted for currency, revenue also adjusted for trading days

The Group's business in Asia Pacific is the region's market leader, operating across 12 countries with around 1,000 employees complemented by local language websites.

During the year the region reported underlying sales growth of 9% which, combined with ongoing operating leverage, delivered a 26% increase in contribution at constant foreign exchange (33% as reported). Contribution as a percentage of sales increased by 1.6% points to 10.5%.

A successful year reflected the progress made in leveraging the Group's global operating model and capabilities whilst maintaining a local focus. During the year an additional 80,000 products have been added to warehouses in Australia, China, Hong Kong, Japan and Singapore, enabling the region's customers to enjoy faster delivery of locally-stocked electronics, maintenance, and automation and control products. In particular, we invested around £7m in stock specifically for the Chinese market in our new Shanghai warehouse. We expect that this will enable further market share gains for our China operation.

The web remains a key sales and marketing channel across the region and eCommerce revenues grew by 32% during the year, driven by ongoing investment in improved functionality, including online quotes and additional payment methods, and the introduction of our online chat service, Live Chat, in China and Japan. Local initiatives included the opening of store fronts on TaoBao and Alibaba in China to ensure we can reach and attract as many customers as possible. As in Continental Europe, our eCommerce platform has also allowed us to meet customer demand in new markets such as Indonesia, where we currently do not have a local office, by creating a new website that is available in both English and local language versions.

Our excellent customer service levels have been recognised in the form of several customer service awards, such as the China Best Customer Contact Center Industry Promising Star of the Year, 2011. Additionally, the 2011 customer satisfaction survey conducted by TNS resulted in a score significantly ahead of the trade/distribution sector benchmark in Asia Pacific.

In many parts of the region, notably China, a key business issue is attracting and retaining talented employees, and it is pleasing to see that the benefits of numerous initiatives we have taken in this respect have delivered falling staff turnover rates and rising employee engagement scores, which bodes well for the future growth and development of our operations in the region.

UK

(1) Revenue adjusted for trading days

Our UK operation is the largest high service distributor in the country, and continued to grow during the year, reporting underlying sales growth of 3%. Gross margin increased by 1.0% point to 50.0%, with the business benefitting from its price differentiation strategy, increased discount effectiveness and the favourable impact of foreign exchange movements. The 5% growth in operating costs reflected increased sales volumes and inflation, increased stock holding costs together with investment at our Nuneaton distribution centre. Consequently the business reported 4% contribution growth and an increase in contribution as a percentage of sales of 0.6% points to 29.1%.

The UK management team continues to leverage the Group's strategy, in particular the electronics offer and eCommerce channel, as well as developing new revenue streams. Its success in this is evident not only in the fact that the UK's sales and contribution are above their pre-recession levels, but also in the industry-leading customer satisfaction survey scores. The latest such survey conducted by TNS showed a further improvement in the UK's score, putting the business in the top decile globally in its benchmark group.

The business is benefiting from the improvements made to the electronics offer over the past few years, with a further 32,000 products added to this range in the past year to take the total new product introductions in this category to almost 70,000 over two years. This delivered electronics revenue growth in the year against a backdrop of a declining electronics market, as measured by the Association of Franchised Distributors of Electronic Components (AFDEC).

eCommerce revenue grew by 11% during the year, with eCommerce revenue share exiting at 59% compared to 57% a year ago. This strong performance was driven by a number of initiatives. These included working with Google to increase our search engine marketing reach, which resulted in a 34% increase in traffic to our website, the introduction of a new search and browse functionality and the introduction of our online chat service, Live Chat.

The development of new revenue streams continues to gather momentum. The UK added a further 13 corporate accounts during the year on multi-year agreements, taking the total number of corporate accounts past 150. These customers now contribute around a quarter of the UK's sales.

Other initiatives included the introduction of dynamic pricing strategies for specific product categories, which has delivered encouraging results to date in terms of both sales growth and margin uplift in areas such as lighting.

There was also an effective campaign to target machine panel builders, a new customer segment that grew at 7% as a result of this initiative, significantly ahead of the UK's overall growth rate.

PROCESSES

(1) Adjusted for currency

The Group's Processes include Electronics, Maintenance, eCommerce, Supply Chain and Global Information Technology. Between them, these Processes have responsibility for the identification, introduction and sourcing of the Group's products, managing supplier relationships, developing and implementing the Group's eCommerce strategy, managing the Group's stock (both quantity and location) and the Group's worldwide systems infrastructure.

Process costs as a percentage of sales increased slightly, by 0.1% points. The continued investment in the implementation of the electronics and eCommerce strategies, together with increased variable costs associated with the strong International sales growth, resulted in Process costs increasing by 8% at constant exchange rates.

The Electronics division introduced 32,000 new products from suppliers such as Panasonic, Tyco Electronics, Texas Instruments and Analog Devices, and signed authorised re-seller agreements with Renesas in China and Micrel in Europe, Middle East, Africa and Asia Pacific. We are also one of only two authorised distributors of the Raspberry Pi, the low-cost, credit card-sized computer board designed to seed a new generation of programmers. The success this team has had in transforming our electronics range over the past two years was recognised in a number of prestigious external awards, notably both Company of the Year 2011 and Distributor of the Year 2011 at the Elektra European Electronics Industry 2011 Awards.

The Maintenance team introduced 8,000 new products in the year, two-thirds of which were from the Group's global strategic suppliers. This focus on strategic suppliers continues to deliver considerable success, with sales from these suppliers growing 11%, 4% points faster than the overall Group sales growth rate. New global deals were signed with Omron, SMC and Honeywell during the year to further strengthen our position with leading suppliers. A focus of the team remains the automation and control category, a category that grew by around 10% during the year and that we will continue to target going forward.

eCommerce has been focused on driving additional traffic and orders to our websites. During the year new search and browse functionality has been added and we have continued to switch our marketing spend from paper catalogues to search engine marketing. As a result of these initiatives, we increased our online traffic by 23%, including 39% growth in traffic from search engines across the Group. The team also introduced Live Chat services to customers in France, UK, China and Japan, enabling us to keep and convert more of this traffic into orders, with conversion rates rising by 5% in these markets post launch of Live Chat. Further innovative applications were added during the year, including apps for iOS and Android, My Local RS app and enhancements to the award-winning eTech magazine. A successful year was externally recognised with a number of prestigious awards, including the award of Best eCommerce Marketing Initiative at the 2011 eCommerce Awards for Excellence for the team's search engine marketing strategy.

Supply Chain supported the new product introductions, notably the significant stock investment in China and the move to a new, larger warehouse in Shanghai. Against this backdrop of large numbers of new product introductions, Supply Chain has maintained high service levels, which has been critical to the improvement in customer satisfaction scores achieved by the UK, Continental Europe and Asia Pacific regions. The team also received recognition themselves at several external awards, including the Logistics and Distribution Operations award at the European Supply Chain Excellence Awards.

The Global Information Technology Process oversees and manages the Group's transactional systems and eCommerce platform, and delivered a number of significant projects during the year which underpin the Group's strategy. These included transitioning our North American business from a bespoke transactional system to a new SAP platform, together with the upgrade of the UK and Continental European SAP systems to the latest version of SAP. This latter project will not only provide a stable platform for these parts of the business until at least 2020, but it will also provide a template from which SAP will be rolled out into our Asia Pacific region in the coming years, after which we will have a common systems platform globally from which to drive Group sales, marketing and product initiatives. The team also moved our data centre facilities for UK and Continental Europe from London to Scotland, in the process enabling us to increase our capacity for growth and provide greater flexibility for change.

TAXATION

The Group's effective tax rate was 31%, which was the same as the prior year. The Group's current effective tax rate includes the effect of a significant and continuing increase in the deferred tax liability due to the tax amortisation of overseas goodwill. This deferred tax liability is not expected to crystallise in the foreseeable future. This means that the effective tax rate was significantly higher than the cash tax rate of 22%. The cash tax rate is expected to increase to around 25% as prior year tax losses are utilised.

PENSION

The Group has defined benefit pension schemes in the UK, Ireland and Germany. All these schemes are closed to new entrants and in Germany the pension scheme is closed to accruals for future service.

Under IAS 19, the combined gross deficit of the Group's defined benefit schemes was £8.3m at 31 March 2012. This balance comprised a £5.8m deficit in Germany, £1.8m deficit in the Republic of Ireland and £0.7m deficit in the UK.

The largest defined benefit scheme is in the UK where the accounting valuation as at 31 March 2012 disclosed a surplus of £10.6m, compared to a surplus of £24.9m last year. This movement was principally caused by higher liabilities, due to a lower discount rate assumption, partially offset by actuarial gains caused by returns on assets being higher than expected. The £10.6m surplus has not been recognised in the Group accounts, as per IFRIC 14, which results in a small deficit of £0.7m.

The net pension cost (non cash) recognised in the Group income statement in the year ending 31 March 2013 is expected to increase by around £2m, principally reflecting lower discount rate assumptions and lower investment returns.

CURRENT TRADING AND OUTLOOK

In the first seven weeks of the new financial year, the Group has delivered sales at a similar level to last year. The International business declined by 2% and the UK grew by 4%. Within International, Continental Europe declined by 1% and both North America and Asia Pacific declined by 3%.

Whilst we are mindful of economic conditions and recognise that comparatives will remain demanding during the first half of the new financial year, we believe that the Group is well placed to continue to take market share in international markets. Therefore we are continuing to invest to drive performance in the coming years.

Ian Mason, Group Chief Executive

Simon Boddie, Group Finance Director

24 May 2012

Group Income Statement

For the year ended 31 March 2012

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2012

Group Balance Sheet

As at 31 March 2012

Group Cash Flow Statement

For the year ended 31 March 2012

Consolidated Statement of Changes in Equity

For the year ended 31 March 2012

Notes to the Preliminary Statement

For the year ended 31 March 2012

1. Analysis of income and expenditure

Distribution and marketing expenses within contribution comprise local costs incurred relating to the selling and distribution of the Group's products, and are attributable to the region to which they relate.

Distribution and marketing expenses within Groupwide Process costs comprise the identification, introduction and sourcing of the Group's Products, managing supplier relationships, developing the Group's eCommerce strategy and development, managing the Group's stock (both quantity and location) and the Group's worldwide IT infrastructure.

2. Segmental reporting

In accordance with IFRS 8 Operating Segments, Group management has identified its operating segments. The performance of these operating segments is reviewed, on a monthly basis, by the Group Chief Executive and the senior management team (the Group Executive Committee).

These operating segments are: the United Kingdom, Continental Europe, North America and Asia Pacific. The United Kingdom comprises operations in the United Kingdom and exports to distributors where the Group does not have a local operating company. Continental Europe comprises operations in France, Germany, Italy, Austria, Denmark, Norway, Sweden, Republic of Ireland, Spain, Switzerland, the Netherlands, Belgium, Poland, Hungary and the Czech Republic. North America comprises operations in the United States of America and Canada. Asia Pacific comprises operations in Japan, Australia, New Zealand, Singapore, Malaysia, Philippines, Thailand, Hong Kong, Taiwan, People's Republic of China, South Korea, Chile and South Africa.

Each reporting segment derives its revenue from the high service level distribution of electronics and maintenance products.

Intersegment pricing is determined on an arm's length basis, comprising sales of product at cost and a handling charge included within Distribution and Marketing expenses.

The Group derives its revenue from two product types:

3. Income tax expense

4. Earnings per share

5. 2012 final dividend

The timetable for the payment of the proposed final dividend is:

A final dividend of 6.75p per share relating to the year has been proposed since the period end.

6. Pension schemes

The principal assumptions used in the valuations of the liabilities of the Group's schemes were:

The expected long term rates of return on the schemes' assets (net of administrative expenses) as at 31 March were:

Based upon the demographics of scheme members, the weighted average life expectancy assumptions used to determine benefit obligations were:

The net (income) costs recognised in the Income Statement were:

The valuations of the assets of the schemes as at 31 March were:

No amount is included in the market value of assets relating to either financial instruments or property occupied by the Group.

The amount included in the balance sheet arising from the Group's obligations in respect of its defined benefit pension schemes was:

As at 31 March 2012 the UK defined benefit pension scheme reported a surplus of £10.6m (2011: £24.9m). In accordance with IAS19 Employee benefits and IFRIC 14, the Group does not recognise this pension surplus as it has neither an unconditional right to a refund nor the unconditional right to run the scheme off on a last survivor basis (due to the Trustees powers to wind up the scheme).

Sensitivity analysis of the impact of changes in key IAS 19 assumptions

7. Intangible assets

8. Property, plant and equipment

9. Cash and cash equivalents / net debt

10. Principal exchange rates

11. Basis of preparation

Electrocomponents plc (the "Company") is a company domiciled in England. The Group accounts for the year ended 31 March 2012 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in a jointly controlled entity. Subsidiaries are entities controlled by the Company. All subsidiary accounts are made up to 31 March and are included in the Group accounts. Further to the IAS Regulation (EC 1606/2002) the Group accounts have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use by the EU ("adopted IFRS").

The accounts were authorised for issue by the Directors on 24 May 2012.

The accounts are presented in £ Sterling and rounded to £0.1m. They are prepared on the historical cost basis and adopt the going concern basis.

The preparation of accounts in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable, under the circumstances, the results of which form the basis of making the judgements about carrying values and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 March 2012 or 2011. Statutory accounts for 2011 have been delivered to the Registrar of Companies, and those for 2012 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2011 and 2012.

Copies of the Annual Report and Accounts for the year ended 31 March 2012 will be available from 8 June 2012 from the Company Secretary, Electrocomponents plc, International Management Centre, 8050 Oxford Business Park North, Oxford OX4 2HW, United Kingdom. Telephone +44 (0)1865 204000. The Report will also be published on the Corporate web site at www.electrocomponents.com.

The Annual General Meeting will be held at Electrocomponents plc, International Management Centre, 8050 Oxford Business Park North, Oxford OX4 2HW, United Kingdom on Friday 13 July 2012 at 12.00.

Safe Harbour:

This preliminary statement contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of Electrocomponents plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as "intends", "expects", "anticipates", "estimates" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although Electrocomponents plc believes that the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, which may be beyond the control of Electrocomponents plc, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be listed, Electrocomponents plc has no intention or obligation to update forward-looking statements contained herein.