Avnet celebrates $US7 billion worldwide revenue hike

Leading distributor of IT solutions, Avnet, has returned a massive $US7 billion hike in worldwide revenue for the 2010/11 financial year ending July 2.

Revenue was $US26.534 billion up from the FY2009/10 figure of $US19.16 billion.

Operating income grew 1.4 times faster than revenue to over $US1 billion for the first time., despite the company making significant investments in acquisitions and integrating them into the business.

These record-breaking results, along with the company’s proven ability to consistently deliver returns within its target range, led Avnet’s management and the Board of Directors to authorize a $US500 million share repurchase program.

The decision to buy back stock is a direct result of the company’s long term financial discipline that has created improved cash generation.

For its fourth quarter FY2010/11, Avnet’s revenue reached a record of $US6.91 billion, and adjusted diluted earnings per share of $US1.22 was a record for the fifth consecutive quarter.

Avnet Technology Solutions’ reported revenue of $2.95 billion grew 41.2 per cent year over year, and pro forma revenue grew 15.8 per cent year over year.

Chief Executive Officer, Rick Hamada, said, “We began our fiscal year with three significant value-creating acquisitions that expanded our global footprint in higher growth markets and increased our customer base and franchised supplier line card.

“These investments, combined with double-digit, year-over-year organic growth, added over $US7 billion to our top-line. Adjusted operating income grew 1.4 times faster than revenue to over $US1 billion, driven by operating leverage and acquisition synergies.

“As a result, return on capital employed [ROCE] improved 76 basis points year over year to 15.4 per cent, which is within our target range of 14 per cent to 16 per cent for the full fiscal year.

“As we begin fiscal 2012, we are comfortable that we have adequate liquidity to continue to grow shareholder value by investing in organic growth and value-creating mergens and acquisitions (M&A) while opportunistically returning cash to shareholders through a buyback program.”

Although Avnet Technology Solutions’ sequential growth was at the high end of typical seasonality, stronger growth in Asia and the Americas was offset by continuing sluggish growth in Europe, the Middle East and Africa (EMEA).

Regional revenue for Avnet Technology Solutions’ fourth quarter fiscal year 2011 was:

• Americas - $US1.61 billion USD, up 25.3 per cent year over year on a reported basis
• EMEA - $US876.8 million USD, up 64 per cent year over year (or 46.1 per cent excluding the impact of foreign currency exchange rates) on a reported basis
• Asia - $US460.6 million, up 72.3 per cent year over year on a reported basis

Industry-standard servers, storage and software all grew over 60 per cent year over year due to investments made in acquisitions and its solutions sales model. Avnet TS also saw double-digit, year over year growth in networking and services.

Hamada said, “While it appears that the global economic recovery may be slowing, the technology markets we serve continue to lead the recovery and we are vigilantly monitoring customer and supplier input as we enter the second half of the calendar year.

"As we begin fiscal 2012, we are committed to building on the momentum from fiscal 2011 as we move beyond the major integrations in fiscal 2011 and start to capitalize on the expanded profitable growth opportunities in both operating groups.”

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