RONA INC.

TSX : RON
TSX : RON.PR.A


RONA INC.

December 06, 2012 08:00 ET

RONA Announces its Strategic Priorities

Refines Business Model to Build on Existing Financial Priorities

Underscores Corporation's Ongoing Efforts to Focus on Near-and Long-Term Value Creation Opportunities

BOUCHERVILLE, QUEBEC--(Marketwire - Dec. 6, 2012) - RONA inc. (TSX:RON)(TSX:RON.PR.A), the largest distributor and retailer of hardware, home renovation and gardening products in Canada, today announced its strategic priorities under the leadership of Acting President and Chief Executive Officer, Dominique Boies. RONA's management team, with the support of the Board of Directors, will immediately focus its efforts and resources on three strategic priorities: leveraging the strengths of the Corporation's core businesses, growing key customer segments through a more compelling value proposition, and unlocking the profit potential of a simplified business model.

Using the same rigour and disciplined approach introduced a year ago with the three financial priorities, the strategic priorities will further refine RONA's business model and enable the Corporation to accelerate value creation for its stakeholders. The three strategic priorities are described below.

Leveraging the strengths of our core businesses

  • Assessment of all business units based on the following criteria:
    • Core competencies;
    • Market position and competitive advantage;
    • Contribution to EBITDA and return; and
    • Scalability.
  • Dispose of non-core assets and redeploy capital to further leverage core assets.

Growing key customer segments through a more compelling value proposition

  • Establish and deliver a clearer value proposition for key customer segments: in-store, distribution services offered to our dealers, and online;
  • Adapt all touch points including stores and distribution network to deliver improved positioning; and
  • Deliver on the basics in a measurable way before adding new features/innovations.

Unlocking the profit potential of a simplified business model

  • Realign the critical operational functions of our retail and distribution businesses: national vs. regional/local structure for marketing, merchandising, operations, supply chain and information technology;
  • Optimize administrative/support functions, standardize processes in both sectors and build on them through the development of a culture of constant improvement; and
  • Improve retail EBITDA margin in line with industry standards.

"RONA, through its dedicated dealer-owners and employees, has built a very strong and valuable Corporation over the past 73 years," said Dominique Boies, Acting President and Chief Executive Officer. "RONA has grown through a series of strategic acquisitions to expand its footprint, consolidated the market to introduce scale and developed various stores formats to support its leading position in Canada. This strategy allowed us to transform RONA into the leading domestic hardware, home renovation and gardening products retailer."

"RONA's nationwide growth did not come without a certain level of complexity. The focus on our three strategic priorities will enable us to simplify our business model, reconnect to our roots as one of Canada's best distributors, clarify the value proposition for our retail and professional customers and therefore enable us to maximize the value of our core businesses. Our strategic priorities are perfectly aligned with our three financial priorities and underscore our efforts to compete in today's marketplace and improve our operational and financial results", added Mr. Boies.

Similar to the practice adopted for the disclosure of its financial priorities, RONA will provide quarterly updates on specific initiatives and precise key performance indicators for each of the three strategic priorities. RONA's Acting President and Chief Executive Officer will also meet with investors and stakeholders in coming weeks to discuss the Corporation's strategic and financial priorities.

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 $4.8 billion. For more information, please visit www.rona.ca.

Contact Information

  • 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