RONA Outlines 2013-2015 Transformational Strategy

RONA Outlines 2013-2015 Transformational Strategy 
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 a
ssets: 
    --  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." 
Mr. Boies added: "Dedicated teams are currently executing or planning
the various initiatives to drive short-term and longer term results.
Short-term actions to redefine the support functions and operating
model will result in $35-45 million of expected EBITDA improvement.
These benefits and freed up capital from non-core assets will be
re-invested in our core businesses in order to deliver the industry
leading offering that our customers and dealers have come to expect
from us. Leverage from positive same-store sales, in a more
constructive economic environment would enhance the positive impact
of those initiatives." 
The 2013-2015 transformational plan - Progress to date 


 
1.  Adapt our administrative support and process model to a leaner and more
    efficient organization 
    --  Direct and indirect detailed SG&A reduction program ready to be
        deployed; 
    --  Detailed transition plan developed for 200 employees affected by the
        reorganisation of our administrative support functions.
 
2.  Execute rapidly the plan for enhanced customer experience and improved
    performance 
    --  With the help of outside industry specialists, specific initiatives
        developed to revamp merchandising program and optimise pricing
        strategy in order to regain profitable market share in core
        businesses; 
    --  Further workstreams in progress to improve in-store operations, IT
        and supply-chain effectiveness.
 
3.  Optimize/rationalize non-core and underperforming assets 
    --  With the help of outside advisors, strategic options evaluated
        including sale of some assets, partnership with strategic player,
        rationalization/closing or optimisation of some stores/facilities.
 
4.  Strengthen, leverage and grow our core markets where profitability is
    already strong 
    --  Plan to improve dialogue and support to franchised and affiliated
        dealers; 
    --  Repositioning of the TOTEM banner into RONA's new proximity model
        well underway; 
    --  Redefinition of the Reno-Depot banner proposition to offer best
        value for the professional contractor and expert Do-it-Yourself
        buyers (DIY) in progress.

 
The different initiatives of RONA's 2013-2015 transformational plan
are perfectly aligned with the Corporation's strategic and financial
priorities. Similar to the practice adopted for the disclosure of its
financial priorities, RONA will provide quarterly updates on specific
ongoing initiatives and achievements. Key performance indicators will
be provided and reported on for several of the initiatives included
in the transformational plan as implemented.  
FORWARD-LOOKING STATEMENTS  
This Press Release includes "forward-looking statements" that involve
risks and uncertainties. All statements other than statements of
historical facts included in this Press Release, including statements
regarding the prospects of the industry and prospects, plans,
financial position and business strategy of the Corporation may
constitute forward-looking statements within the meaning of the
Canadian securities legislation and regulations. Investors and others
are cautioned that undue reliance should not be placed on any
forward-looking statements. 
For more information on the risks, uncertainties and assumptions that
would cause the Corporation's actual results to differ from current
expectations, please also refer to the Corporation's public filings
available at www.sedar.com and www.rona.ca. In particular, further
details and descriptions of these and other factors are disclosed in
the MD&A under the "Risks and uncertainties" section and in the "Risk
factors" section of the Corporation's current Annual Information
Form. 
The forward-looking statements in this Press Release reflect the
Corporation's expectations as at February 21, 2013, and are subject
to change after this date. The Corporation expressly disclaims any
obligation or intention to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwi
se, unless required by the applicable securities laws. 
ABOUT RONA 
RONA is the largest Canadian distributor and retailer of hardware,
home renovation and gardening products. The Corporation operates a
network of over 800 corporate, franchise and affiliate retail stores
of various sizes and formats under different banners, and a network
of 14 hardware and construction materials distribution centres. RONA
is also a leader in the specialized plumbing and HVAC market,
primarily serving commercial and professional customers with a
network of close to 60 sales outlets and four distribution centres
across the country. With close to 30,000 employees, the RONA store
network generates consolidated sales of $4.9 billion. For more
information, please visit www.rona.ca.
Contacts:
Media
Valerie Lamarre
Senior Advisor, Communications and Public Affairs
RONA Inc.
514-599-5900, ext. 5271
valerie.lamarre@rona.ca 
Financial Community
Stephane Milot
Vice President, Finance and Investor Relations
RONA Inc.
514-599-5951
stephane.milot@rona.ca
 
 
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