BOUCHERVILLE, QUEBEC -- (Marketwire) -- 02/21/13 -- Strategy aims at improving national distribution offering for dealers, optimizing retail and contractor proximity models across Canada and strengthening leadership position in Quebec
Benefits from efficiency improvements and freed up capital from non-core assets to be re-invested in store renovation, merchandising, pricing strategy and service to customers and dealers
RONA inc. (TSX: RON)(TSX: RON.PR.A), the largest Canadian distributor and retailer of hardware, renovation and gardening products, outlined today its plan to transform the Corporation and accelerate value creation for its stakeholders. Over the past two months, RONA's senior leadership team has been focusing on a number of strategic priorities that will redefine the Corporation's business model. The transformation, which has been approved by RONA's newly composed Board of Directors, will be deployed over the next twelve months and yield a growing contribution to profitability with full benefits expected within twenty-four months.
Dominique Boies, Acting CEO, Executive Vice President and CFO mentioned: "This is a very important day in the history of RONA. We are facing short term headwind in our industry with key indicators trending downward but the fundamentals of the renovation and construction industry remain robust. I strongly believe the strategy we are announcing today will allow RONA to achieve profitable growth and become one of the best performers in the identified core businesses".
Highlights of the 2013-2015 transformational plan
1. Adapt our administrative support model to a leaner and more efficient organization -- Expected improvement of $35M to $45M in EBITDA, a 15% plus increase over the next 24 months; -- Reduction of approximately 15% or 200 full-time positions at administrative offices across Canada; -- Expected restructuring charge of $25M.2. Execute rapidly the plan for enhanced customer experience and improved performance in the areas of: -- Merchandising; -- Pricing strategy; -- Service in-store and to franchised and affiliated dealers.3. Optimize/rationalize non-core and underperforming assets: -- Commercial and Professional Market division; -- Big-box network outside Quebec.4. Strengthen, leverage and grow our core markets where profitability is already strong: -- Our dealers across Canada; -- Our corporate proximity stores across Canada serving both retail consumers and contractors; -- Our leading Quebec banners;
RONA's newly appointed Executive Chairman, Robert Chevrier mentioned: "The newly composed Board of Directors fully support management initiatives to rapidly transform the Corporation and turnaround its financial performance in a sustainable way. The Board will monitor closely the execution of the transformation plan and further examine strategic initiatives to deliver value for our stakeholders."
Mr. Chevrier added: "Within the search process for the appointment of the new president and Chief Executive Officer, the evaluation of potential candidates is well underway and a decision should be announced shortly. The selected candidates are well aware of the new strategic direction the Corporation is taking and would rapidly be able to lead us through this period of changes."