Avnet surpasses $6bn revenue milestone


Avnet surpasses $6bn revenue milestone

Microscope contributor

Avnet has broken through the $6bn sales barrier in its fiscal first quarter on the back of double digit organic growth and three acquisitions.

Revenues at the largest VAD on the planet grew 42% to $6.2bn, including 26% growth on a pro-forma basis while profits were $138m compared to $51m in the same period a year ago.

The acquisitive US distributor concluded three purchases in July during fiscal 2010 including Bell Microproducts, Tallard Technologies and Unidex which will add around $4bn in sales a year to Avnet's P&L accounts.

Roy Vallee, Avnet CEO, said the deals built its economies of scale in "key technologies" and standing in "higher growth geographies".

"As we complete the integrations throughout the balance of fiscal 2011 and fully realise the anticipated synergies of at least $60m, we will be better positioned to take advantage of additional growth opportunities," he said.

The Electronics Marketing unit grew 48.5% to $3.6bn (40% organically) and the Technology Solutions division was up 34% to $2.5bn (11% organically).

Vallee said operating profits at Avnet TS grew 10% but operating margins declined due in large to the impact of the acquisitions as the "expense synergies" were not yet realised and the margins of those businesses were historically lower.

He added that the integration of Bell and Tallard into Avnet TS were progressing as planned and it remained committed to reaching the previously stated aim of 30% return on working capital.

The forecast for fiscal Q2 ended 2 January has EM sales in the range of $3.4bn and $3.7bn and TS sales are expected to be between $2.9bn and $3.3bn. 

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