Committed family and associate shareholders
Sonepar moves forward thanks to the constant, enlightened support of its family shareholders. They uphold a program called C.A.R./C.S.R., Colam Shareholder Responsibility, which encourages associates to own company shares.
Unwavering family shareholder support
The family shareholders grouped together in the family holding company, Colam Entreprendre, consistently support Sonepar’s strategy for sustainable growth.
A major strength of the family shareholding group is that it has successfully tackled the generational challenge.
Young shareholders who have reached age eighteen get to take a special Introductory Seminar and may do internships at Sonepar. In addition, all shareholders can enrol in courses through what we call the Colam Education Path. In 2016, over forty members took part in the seven modules offered. Last but not least, shareholders have the opportunity to get involved in working groups, for example on corporate social and environmental responsibility.
The efforts launched in 2014 as part of the Colam Shareholder Responsibility program gave rise in 2016 to Colam Reporters (film reports by family shareholders on sustainability and social innovation work carried out by Sonepar associates), and the Colam Awards (a contest organized to acknowledge initiatives at Group subsidiaries that have an impact on the environment, sustainable development, people and society as a whole).
Developing associate share ownership
For more than two decades, Colam Entreprendre and Sonepar have been acting on the bedrock belief that those who work for the Group should be offered a stake in it—a highly unusual policy at privately held, family-owned companies. The Group has managed over time to overcome the standard obstacles to such a policy, putting in place procedures guaranteeing that the shares of any associate shareholder who wants to sell will be bought back.
- 10% of Sonepar’s managers hold company shares
Not only does our ambition of having at least 10% of Sonepar’s managers hold company shares feature high up on our agenda. The Group has done what it takes to realize that ambition. In 2015, we offered over 4,000 associates the opportunity to acquire their first shares or increase their holdings. And we intend for them to keep on reaping the benefits of the Group’s growth.
New Articles of Association and stronger governance
To a large extent, Sonepar owes its balanced, sustainable growth to shared values and tried-and-tested structures.
Articles of Association better suited to a global family Group
The family shareholders, represented by the holding company Colam Entreprendre, voted in 2016 to change Sonepar’s legal status from an SA (a limited liability company) to an SAS (a simplified joint-stock company).
For several reasons:
- Such an international Group needs flexible, responsive governance to be able to adapt to a wide variety of countries;
- the ability to select the best governance practices while maintaining its own approach to sound management;
- and a structure suited to an unlisted family enterprise, with its unique characteristics.
Although the SAS corporate form did not exist when Sonepar was founded, it is now well-established and is currently the legal framework best suited to meeting the requirements agreed to by shareholders and executive management alike. SAS status makes it easier to pursue and strengthen a strategy that calls for swift, effective decision-making, clear delegation of responsibility, strict management, calculated risk-taking based on compliance with financial security ratios, and a balance between trust and adequate control. In other words, Sonepar’s key assets.
Sonepar’s Governance Charter
In the Governance Charter, responsibilities at every decision-making level are clearly spelled out with the overriding aim of making the Group “La Référence.” The rights and responsibilities of all shareholders and executives are presented in detail. The Charter requires everyone to behave toward others as they would want to be treated themselves; refrain from any actions or decisions they would not be able to defend in public; promote integrity, create motivation and reward loyalty, efficiency and initiative; and develop a mindset of mutual respect between the company and its members.
A holding company, Colam Entreprendre, brings together the family shareholders. Colam Entreprendre defines the rules on debt levels, sets demanding security ratios and performance targets and ensures the implementation of a calculated risk-taking policy. All associate shareholders hold their shares through an entity called Sonepack. Together, the family and associate shareholders own Sonepar’s share capital.
The Governance Charter
The Governance Charter puts forward the following operating principles, which everyone is expected to implement:
- Combine trust with adequate control;
- Make responsibility for security and control everyone’s business;
- Ensure that information is protected and shared where needed within the Group;
- Refrain from using one’s title or position as a means to procure pecuniary or other advantages; the obligation to report any conflict of interest, even potential.
The shareholders’ meeting
- 250 participants
- 1,000 others attend electronically
Roughly 250 direct and indirect Sonepar shareholders attend the general shareholder’s meeting in person and nearly 1,000 others attend electronically every year, At this essential event, the Group’s results in the preceding year and its strategic priorities going forward are presented so that everyone can be informed of Sonepar’s goals and actions and take part in developing a shared vision of the Group’s future. That vision is ratified by a family shareholders’ vote.
The Corporate Board
Following the changeover to SAS status, which grants the Chairman more extensive powers, the Board of Directors was replaced by a Corporate Board. It is composed, like the previous Board, of figures from the business world, family entrepreneurs and executives with historical roots in Sonepar who meet several times a year. The Corporate Board draws on a steady output of reporting tools, Audit Committee reports and papers from the Strategy Committee to examine Group performance. In addition to considering possible adjustments to the company’s governance, its members monitor progress and achievements regarding Sonepar’s main strategic priorities. They also examine the risks and opportunities that come with business diversification and offers its opinions to executive management.
The Audit, Compensation and Strategy Committees
These three Committees act in support of the Corporate Board and the Chairman, both assisting with and amplifying corporate governance. Each one represents a mix of advisors and family shareholders. Their role is to perform studies, make recommendations, investigate particular issues and contribute to the Corporate Board’s thinking. Created in May 2016, the Strategy Committee focuses specifically on the Group’s long-range business-line strategy and provides valuable insights to the Corporate Board.
Compliance: a strategic challenge
Sonepar has taken early action to deal with growing legal and regulatory complexity in the 44 countries where it has a presence.
The Compliance Program put in place by the Group to further those goals rests on four key pillars:
Competition law, the fight against corruption, export controls, and data protection/associate security.
In 2016, the General Counsel went further with its training efforts, for example with its e-learning module on competition law, available in 21 languages. Initially for members of the executive bodies in Sonepar country organizations, the program will now be extended to Sonepar associates who work with suppliers and customers. The program is deployed by Sonacademy in cooperation with Group Human Resources directors.
A taskforce was set up last year to meet the requirements of the new Sapin 2 anti-corruption act, with France as the pilot country. Those include mapping compliance-related risks, reporting on suppliers and customers, a Group code of business conduct, monitoring and training systems. The same goes for the EU personal data protection directive due to enter into force in 2018, with a Group team already working on the necessary IT systems and digital infrastructure.
« Compliance means excellence, a sustainable organization and peace of mind for all our people. »
A five-point action plan
Similarly, the SILCC, or Sonepar International Legal and Compliance Committee, created in 2015 to facilitate the dissemination of good operating practices, rolled out a five-point action plan. It covers the way the SILCC operates; an analysis of the Group Legal Department’s strengths and weaknesses; the inclusion of non-financial indicators in Group reporting; compliance versus legal; digital transformation and incorporating compliance into the process; and expanding the Group’s legal work.
All of these initiatives will help Sonepar to develop further, boost operational excellence and ensure the utmost security for both its operations and its people. The General Counsel has also designed a travel security passport to provide maximum physical safety and protection of sensitive data during trip by Group associates.
Effective tools for demanding management
With its internal audit and management control procedures, Sonepar upholds the most demanding international standards.
Internal Audit: constant, exacting assessment
The mission of Sonepar Internal Audit is to provide reasonable assurance on risk management, reporting, control and governance processes.
- 18 auditors
- 97 engagements
Last year, 18 internal auditors based at six locations in Europe, the Americas and Asia conducted 97 engagements, spanning Logistics, Inventory and Procurement (33% of all audits), Finance, Credit Management, Internal Control and Governance (34% of the total) and IT. In addition, the Group’s risk mapping was updated in 2016 and the extent to which audits covered internal processes was measured.
Management control: evaluating performance
Management control at Sonepar involves measuring and evaluating performance, and continuous enhancement of internal controls. In 2016, a new Group-wide tool for modeling investment profitability was introduced. The team also developed a detailed chart of accounts for more accurate measurement of logistics costs. A standardized procedure for monitoring costs and investments was laid down to help digital transformation go smoothly at Sonepar.
Financial clarity through consolidated accounts
The consolidation of its accounts in accordance with the highest international standards affords the Group a comprehensive view of financial information for its subsidiaries. Sonepar also works constantly to optimize the processes for producing financial information through its reporting system. With two new IFRS standards imposing stricter requirements for financial statement presentation to come into effect in 2018 and 2019, a major project was undertaken in preparation in 2016.
Optimized management with a centrally-run Treasury Department
Cash and financing are centrally managed at Sonepar.
This makes it possible to guarantee adequate liquidity, monitor the utilization of cash and optimize management of the associated exchange-rate and interest-rate risks and financing conditions. In 2016, the Group restructured its revolving lines of credit to gain more advantageous financing conditions. A further financing tool is cash pooling, which facilitates the circulation and centralization of liquidity within Sonepar. At year-end, this approach, which the Group uses wherever it is permitted by law, covered more than 85% of total sales.
Talent: becoming "La Référence"
Sonepar takes an unconventional approach to human resources, based on recognition, education, shared values, trust and security.
Succeeding together by recognizing and making the most of the qualities of every Group associate around the world is a guiding principle at Sonepar. Moreover, it really works—because the Group invests in talent, provides the entire staff with relevant training and takes good care of its people.
Just like our customers, our associates have to consider us the best.
That approach led Sonepar in 2016 to rethink the issue and announce a highly ambitious goal: to become La Référence—the standard-setter—in the field of human resources as well. As Sara Biraschi-Rolland, Senior Vice President, Group Human Resources, put it, “Just like our customers, our associates have to consider us the best. That means in terms of training, career paths and career development.” That’s the challenge. And Sonepar fully intends to meet it.
• More clearly and more consistently defining how much and what kind of talent Sonepar possesses by applying the same criteria in every country. That implies more effectively detecting talented people to help them evolve. The International Talent Review initiated in 2016 brought to light nearly 500 pathways and experiences. The objective in 2017 is to establish a Group-wide talent scorecard.
• Continuing to attract the best people to work at Sonepar around the world by highlighting its unique status as a global, yet decentralized enterprise whose units maintain a strong local identity. In 2016, the Group hired 6,600 new associates.
• Enhancing the various training programs and encouraging the natural trend toward internal networking. The aim is to get people to share and benefit from the broadest possible range of experience.
• Improving the pathways to integration of new associates. That is already one of Sonepar’s key assets. The point at this stage is to take it further.
Additional actions will help us carry out our drive for standard-setting status, which almost seems like an outgrowth of our Group’s history. Sonepar has a strong “employer brand” that is getting stronger all the time. Ours is a company that effectively conveys and shares its values, its trust and its ambitions, because the goal is to add value each and every day.
« Identifying, managing and making the most of talent is our recipe for success. »
Training for everyone
Sonacademy, our corporate university, gives training to several hundred associates of all national backgrounds every year. In 2016, 740 associates representing 26 nationalities enrolled in nine programs. In three years’ time, their numbers have actually tripled. And all our training programs have that distinctive Sonepar “flavor.” The Sonepar Leadership Program aimed at senior managers and the Sonepar Junior Committee designed for young executives have created the kind of momentum that is likely to pay off across the board. By encouraging informal networking, Sonepar gets associates to share their experience and good practices.
Sonepar’s corporate university, offers a variety of training programs to Group executives from around the world.
- 750 participants
- 1 500 days of training
In 2016, they drew close to 750 participants from some thirty countries who received a total of roughly 1,500 days of training.
The programs are enhanced and become more diverse every year. This past year, a new module called “Improving your leadership talent” was introduced.
Digital strategy: a winning formula
Being La Référence means deploying a full-fledged digital strategy. 2016 was a pivotal year, with reorganization and new structures to support our operating staff and enhance customer service.
Sonepar moved in 2016 to advise and support its operating companies around the world so that digital transformation could become a reality for front-line staff. The Group initiated an omni-channel strategy geared to satisfying customer needs, making optimum use of cutting-edge digital tools like connected customers, webshops, sales via mobile phone, product data processing and product feature sharing.
« The Group’s digital transformation is under way. The main beneficiaries will be our customers. »
Digital Competence Centers
As part of a vast plan of action, Digital Competence Centers, meaning hubs focused on specific issues related to the Group’s digital operations, have been started up to encourage the sharing of good practices and provide hands-on support to projects on the ground. The first one, which has been operating since early 2016, is the Mobile Solutions Competence Center. At least ten countries have already benefited in their initiatives to roll out or replace mobile applications. A second such hub, the Product Information Competence Center, also got started in Hanover, Germany, in 2016, with Sonepar PIM Solutions teams as its backbone. In 2017, other Centers are scheduled to come on stream.
That process is already gathering momentum. Last year, Sonepar’s e-business increased once again, while m-Commerce (sales via mobile phone) more than doubled. The quality of technical information and product data in the Group improved—not to mention accelerated sharing of information from country to country.
An international information platform
In another major project, the Digital team worked to establish an international information platform. In 2017, this should make it possible to access a broad range of resources related to digital and to share e-business and digital experience (most notably via Yammer, the Group’s social network).
Digital Development Leaders
Finally, Sonepar set up a team called Digital Development Leaders, whose role is to provide day-to-day support for digital projects in country organizations and subsidiaries
Excelling at how we serve our customers: through a dense network of branches...
To make life easier for our customers, we work constantly to deliver greater value, enhance our skills and services and build relationships. And we’re getting better at it all the time, thanks in particular to our multi-channel distribution.
Achieving operational excellence—providing customers with the best products and solutions, the most suitable service and advice, at the right place and the right time—is an abiding motivation for all Sonepar staff members. But meeting that challenge requires a first-class sales network and first-class training and logistics. Over the years, we have built up our branch network to ensure better coverage, put in place additional distribution channels, brought in new technology, expanded our product ranges, offered a wider variety of services, provided advice, given staff more specialized functions—and offered tailored service.
A dense network of branches
The goal is straightforward yet ambitious—offer customers a place near their premises where they can talk to our staff and get advice. Through its operating companies around the world, Sonepar has developed an increasingly comprehensive sales network, with 2,800 branches (plus a physical presence at 600 customer worksites) that handle up to 5,000 items in stock. A branch is the first stop for customers, as well as an important source of information and advice. And of course, it’s the ideal place to meet and do business with suppliers. We innovate constantly to save our customers time, offering self-service branches with advisory desks, drive-through outlets, longer opening hours and 24/7 load lock chambers. Merchandising is also regularly revamped at our branches to keep pace with the requirements of demanding contractors.
Showrooms, trade shows and services
We have adopted this three-tiered approach to ensure maximum coverage of customer needs. Sonepar’s showrooms are dedicated spaces for displaying innovative, end-to-end solutions under real operating conditions. Examples include decorative and architectural lighting, smart home and building management and energy-saving systems. The Group also exhibits at trade shows and other exhibitions. In addition, Sonepar teams are on hand to assist customers with the design and implementation of even the most complex projects, performing technical studies if needed. These are advanced services in a variety of areas: lighting, heating, air conditioning, industrial processes and controls, home automation, telephony, video surveillance, building management and the quest for greater energy efficiency.
Accelerated product renewal and the growing technical complexity of increasingly integrated and interconnected solutions make it imperative to help train customers. Sonepar, which already provides its own staff with ongoing training, holds training courses for customers or passes on the programs provided by its suppliers. Many customers appreciate such effective, personalized assistance because it makes the job easier for them and helps them informed make choices and decisions.
Sonepar offers customers a growing number of digital solutions. Continually adjusted to their changing needs, those solutions provide easy, real-time, around-the-clock access to information on product availability, delivery time frames and prices. As a result, customers can order products, track their orders and deliveries and access tailored service for invoicing, financing, product or system configuration and more. Sonepar offers a constantly expanding range of digital solutions that include mobile applications (with regularly enriched features like delivery traceability), webshops and paperless procedures, from Electronic Data Interchange (EDI) to PunchOut, a system that enables customers to access Group webshops directly from their own procurement applications.
... Through supply-chain efficiency
An outstandingly efficient supply-chain function has enabled Sonepar to tackle the daily challenge of finding the best solution for customer requests—anywhere, any time and on time.
Logistics represents a key asset. Increasingly efficient logistics, with centralized, automated warehouses, ensures product availability, flexibility in ordering and rapid, flawless delivery. It also opens up opportunities to offer customers integrated services. But all that forms a highly complex process that extends from the first contact to the final delivery. And along the way, it involves paperless procedures, tailored payment solutions, a shared information management system and in some cases even management of customer inventory.
A wide range of order and delivery options
This multichannel approach to distribution keeps us aligned with customer expectations. Products are made available as soon as customers place orders at branches, each of which is equipped to handle up to 5,000 items. Orders can be placed by phone or online (via webshops or mobile apps) until late in the evening or on weekends, with overnight delivery to customer premises or worksites guaranteed. Between 25,000 and 100,000 items are available for delivery from one the Group’s various distribution centers. This smoothly functioning system enables Sonepar to prepare one million order lines per day! Customers are also offered tailored arrangements such as night-time load lock chambers, secure containers or direct delivery to specific locations on large construction sites. In that way, the Group can provide a broad range of solutions to cover every possible customer need.
Increasingly automated distribution centers
Year after year, we have continued to invest in logistics. New platforms came on stream in 2016, most notably in Canada and the United States. Our Group also initiated the construction, extension and automation of a number of warehouses in France, Sweden, the Netherlands and Germany.
- 110 central warehouses worldwide
Any number of automated solutions have been introduced at these gigantic buildings (some totaling 30,000 square meters), including the mini-load Shuttle Automated Storage and Retrieval System, a computer-controlled system for automatically processing orders, retrieving product loads and managing stocks. In this way, we can guarantee an outstanding order preparation process.
Innovative, tailored solutions
Continually seeking to make our customers’ lives easier, we offer solutions that assist them in streamlining their own procurement processes and managing their stock and inventory systems. Sonepar has developed integrated supply chain management services for this purpose, helping manufacturers enhance customer service.
The solutions we provide range from simple to advanced.
The simpler ones include electronic full-service or specialty catalog management and dedicated websites. In other cases, we manage specific product ranges, install vending machines on customer premises and perform on-site inventory management. A good example of the more advanced solutions we offer is when we assume responsibility for the customer’s entire supply chain—needless to say, with a commitment to quality, reliability and service that sets Sonepar apart from the competition. The customer advantages are self-evident: dedicated expertise, a reliable process and a single supply source offering delivery and quality guarantees—all at reduced cost.
Even as we build up our logistics system and incorporate new technology, we provide Sonepar associates with additional experience and the training they need to make the system work. And that will enable us to deliver better customer solutions and services all the time. In any case, it’s a challenge worth taking on!
a four-pronged commitment
Sonepar pursues a comprehensive approach, but leaves ample room for responsible local initiative.
Sonepar continually enhances its sustainable development work, which revolves around four commitments: supporting initiatives relating to energy transition and demographic change; making Group associates the key drivers of its development; limiting environmental impact; and engaging with local communities.
Energy & Sustainability Weeks increasingly successful in 2016
Over a two-week period, the event takes different forms from country to country. In 2016, there were 800 ESW initiatives. An international contest was launched to reward the best ones. In the Event category, AME in Spain brought together 1,900 customers, suppliers and associates to promote innovative ecological solutions. Viking Electric in the US coordinated a large-scale promotion and sales campaign at 21 branches that won the Sales Operation award. Asia-Pacific was acknowledged for the Best Photo or Video, and TU in the Netherlands for cutting carbon emissions by 19% over a five-year period (in the Environment category).
Heading for an eco-efficient product offering in Germany
Sonepar Deutschland will be offering customers rental agreements with a purchase option for energy-saving products for anywhere from 12 to 60 months. The aim is to arrive at the optimum rental term—meaning a period during which the monthly rent equals the amount of energy saved!
Assisting associates’ children in Spain
For the past four years, Sonepar Ibérica has been operating Building the Future, a program for associates’ children that includes study grants, help with finding jobs, internships or first-time employment at one of the Group’s 129 branches in Spain.
Recycling to pay for children’s healthcare in New Zealand
- 400 collected and recycled mobile phones
Corys Electrical in New Zealand has been running a mobile phone recycling program since 2011. Last year, over 400 phones were collected and then recycled by dedicated organizations that provided financial compensation. That money was given to a children’s hospital.
Project Green Lights in US public schools
For several years now, NorthEast Electrical Distributors has held an annual contest for public schools in the northeastern United States. After they have been told all about the importance of saving energy, the children have to think up ways to make their schools as energy-efficient as possible. The winning school gets a free energy audit and free energy-saving lighting.