Avnet 2003 Annual Report Download - page 17
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Please find page 17 of the 2003 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Toshiba and Western Digital. AC's customers include ABS Computer Technologies, Astra Detentechnik,
Avatar Technology, Avaya, Boldata, CC Compunet, ECS Trading Co. Ltd., GE Medical Systems, MA
Laboratories, Xala Informatica and Western ScientiÑc.
AC's 2003 sales were approximately $1.63 billion, representing 18.0% of Avnet's consolidated sales. AC's
2003 global sales consisted of the following regional results: AC North America sales of $633.1 million, or
7.0% of Avnet's consolidated sales; AC EMEA sales of $888.2 million, or 9.8% of Avnet's consolidated sales;
and AC Asia/PaciÑc sales of $109.4 million, or 1.2% of Avnet's consolidated sales.
AC's sales divisions include the following:
‚ Applied Computing Components serves the needs of manufacturers of general-purpose computers by
providing them with the latest technologies such as microprocessors, DRAM modules and
motherboards.
‚ Applied Computing Solutions provides technical design, integration, marketing and Ñnancing to
developers of application speciÑc computer solutions in the non-PC market place. Examples of these
types of customers are OEMs in the medical, telecommunications, industrial control and digital
creation market segments.
‚ Applied Computing Market Development concentrates on specialized displays, network products and
storage solutions, while targeting mainly VARs and system integrators with its wireless switch and
wireless standalone solutions.
AC's coverage of Europe as of the end of 2003 includes the United Kingdom, Germany, Spain, Italy,
Austria (also services eastern Europe), the Nordic region, the Benelux region, France and Switzerland.
Avnet Technology Solutions (""ATS'')
As discussed above, ATS was formed subsequent to 2003 through the combination of CM and AC. The
sales divisions, product oÅerings and customer and supplier relationships of CM and AC discussed above are
expected to continue under ATS, while overall costs should decrease from the rationalization of various
facilities, equipment and processes. ATS would have accounted for sales of $4.06 billion, or 44.9% of Avnet's
consolidated 2003 sales, had the new operating group structure been in place during 2003. Regionally, ATS's
sales were spread across the Americas ($2.65 billion, or 29.3% of consolidated sales), EMEA ($1.26 billion,
or 13.9% of consolidated sales) and Asia ($154.4 million, or 1.7% of consolidated sales).
Foreign Operations
As noted in the operating group discussions, Avnet's operations are deployed globally with signiÑcant
operations in the three major regions of the world: the Americas, EMEA, and Asia. Historically, Avnet's
operations in the Americas region (primarily the United States) have contributed the largest percentage of
consolidated sales. During 2003, 2002 and 2001, the percentage of the Company's business based in the
Americas has been 56%, 60% and 68%, respectively. The EMEA region's contribution to Avnet's consolidated
sales has remained relatively Öat over the same three-year period. The Asia region has been continuously
growing as a percentage of consolidated sales with 11%, 8% and 4%, respectively, of consolidated sales being
generated there. This growth in Asia is a result of Avnet's continued investment in the PRC, which was
recently admitted into the World Trade Organization, as well as investment in other countries throughout this
rapidly growing region. Management expects the Asia region to continue this growth trend and to contribute a
growing percentage of consolidated sales in the future.
Avnet's foreign operations are subject to a variety of risks including potential restrictions on transfers of
funds, foreign currency Öuctuations, import and export duties, import and export regulations that could erode
proÑt margins, changing foreign tax laws and regulations, potential military conÖicts, less Öexible employee
contracts in the event of business downturns, and the burden and cost of compliance with foreign laws. The
most signiÑcant of these risks is the Company's exposure to foreign currency Öuctuations, which are hedged
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