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New Realities, New Solutions Plan
Achievements - Fiscal year 2012
1. Set up new integrated digital platform
-- Launch of rona.ca for consumers and businesses.-- Strong growth in traffic on digital platforms: rona.ca, online flyer, coupons.rona.ca, ronamag, RONA's Facebook page, RONA's YouTube channel, etc.-- Launch of new RONA mobile app in early August, with over 100,000 downloads to date.
2. Redeployment of sales volume to proximity and satellite stores in close to 20% of the corporate-store network
-- Closure of five of the ten big-box stores slated for closure in 2012: the stores in Brampton, Mississauga and Whitby, in Ontario, and Calgary North and Edmonton West in Alberta. The process of transferring customers and sales volume to other stores in the network went as planned.-- Opening of first new-concept proximity store in Edmonton, Alberta in early August. This store is generating an average basket that is 20% higher than that of the big-box store it replaces. Transformation of TOTEM store network into RONA's new proximity concept.
3. Further development of the commercial and professional segment
-- Optimized recent investments: acquisitions of Don Park, MPH and Decoration 25 (20 outlets in total), addition of five outlets, 175,000- square-foot expansion of the Concord distribution centre in Ontario, and 23,000-square-foot expansion of the Montreal distribution centre, in Quebec.-- Changed the management and operating structure and implemented an efficiency improvement plan.
4. Ongoing development of the RONA dealer-owner network
-- Recruitment of two important dealers in Ontario: Kemptville Building Center in November and Millwork in May and expansion projects of more than $40 million in 2012.-- New dealer support team that combines the best aspects of RONA and TruServ Canada.
5. Anticipated annual recurring benefit of $10 million in 2012, $30 million in 2013 and $40 million in 2014
-- Annual recurring benefit of $10.5 million achieved in 2012 relating to stores closed and partial transformation of TOTEM store network into RONA's new proximity store concept.-- Deliberate postponement of the closure of five big-box stores, to ensure closures are aligned with the opening of new proximity and satellite stores delays expected benefits for 2013.-- 2013 and 2014 benefits will depend on decisions resulting from RONA's transformational plan unveiled today. We will not report on these targets anymore, as these initiatives are now included in RONA's transformational plan.
6. Planned investment of $70 million in property, plant and equipment, financed from the sale of non-strategic assets over 2012 and 2013
-- Investments of $10 million in property, plant and equipment in 2012.-- Sale of $16.5 million in non-strategic assets in 2012.-- Additional investments will depend on decisions to be taken in RONA's transformational plan unveiled today. We will not report on these targets anymore, as these initiatives are now included in RONA's transformational plan.
7. Planned restructuring costs of $110 million related to redeployment of the sales volume in 20% of the corporate-store network
-- $44.3 million in restructuring costs recognized since the plan was put in place in February 2012.-- Future restructuring costs will depend on decisions to be taken in RONA's transformational plan unveiled today. We will not report on these targets anymore, as these initiatives are now included in RONA's transformational plan.
