Carphone Warehouse 2012 Annual Report Download - page 12

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Carphone Warehouse Group plc Annual Report 20128
PRINCIPAL BRANDS
CPW Europe has retail operations in eight markets, predominantly
trading under the brands Carphone Warehouse in the UK and Ireland
and Phone House incontinentalEurope.
CPW Europe provides insurance services under the Geek Squad
brandin each of its retail territories. It also has fixed line telecoms
operations in Spain and Switzerland, providing services to corporate
and residential customers respectively.
OPTION AGREEMENT
In November 2011, the Group took steps to formalise the long‑term
ownership structure of CPW Europe. Under the option agreement
Best Buy have a call option to purchase the Group's 50% stake in
CPW Europe at fair market value in 2015.
If Best Buy do not exercise this option, the Group has a call option
to purchase Best Buy’s stake in CPW Europe at a 10% discount to
fair market value. If neither shareholder exercises its call option
the options roll forward three years, although the Group would
nolonger receive the 10% discount.
CPW Europe is the largest independent telecommunications retailer
inEurope, with2,393 stores at March 2012 and well-developed
onlinechannels.
Its specialisation in combining hardware, connections and services, and ongoing investment
inhigh quality and well‑trained consultants, make it ideally placed to benefit from the evolution
ofsmartphones and other areas of complextechnology.
MANAGEMENT STRUCTURE
CPW Europe has its own experienced
management team, led by Andrew Harrison,
CEO, who has been with Carphone Warehouse
since1995.
Oversight is provided by the Global Connect
board, led by Roger Taylor and comprising
representatives from both shareholders.
KEY FACTS
CPW share 50%
Partner Best Buy
Founded 1989
50%
FUNDING AND DIVIDENDS
CPW Europe has standalone financing,
principally a £400m RCF provided by
asyndicate of banks.
CPW Europe has an agreed dividend
policywhereby dividends are paid annually,
subjectto cover of at least 2.5 times earnings,
andcertain conditions on cash generation
and available funds.
BEST BUY
Best Buy is a world‑leading consumer
electronics retailer, listed on the New York
Stock Exchange, with annual sales of
over$50bn.
It has operations in Canada, Mexico and
China, as well as the US, where it is a market
leader, with market share of over 20% in
several consumer electronics categories.
It has established a reputation for outstanding
customer support, service innovation and
expertise in the whole spectrum of consumer
electronics technology.
OVERVIEW
CPW EUROPE