Avnet 2003 Annual Report Download - page 29
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Please find page 29 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.as this. The only exception has been the relatively strong revenue growth of the Asia region, which continues
to be the recipient of a global shift in technology manufacturing, much of it away from the Americas region.
While the impacts of this downturn on Avnet's business have been consistent across the industry, Avnet
has continued to focus on lowering its cost structure and its working capital in an eÅort to generate proÑts and
to strengthen its balance sheet despite relatively Öat revenue performance. As a result, during 2003 the
Company has seen positive signs of returning to proÑtability following the signiÑcant deterioration in sales and
operating income (loss) during 2002.
Sales
The tables below provide a year-over-year summary of sales for the Company and its operating groups:
Three-Year Group Analysis of Sales: by Operating Group and Geography
Years Ended Percent Change
June 27, % of June 28, % of June 29, % of 2003 to 2002 to
2003 Total 2002 Total 2001 Total 2002 2001
(Dollars in millions)
Sales by Operating Group:
EM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,988.4 55.1% $4,841.9 54.3% $ 8,286.6 64.7% 3.0% (41.6)%
CMÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,429.4 26.9% 2,399.2 26.9% 2,855.6 22.3% 1.3 (16.0)
AC ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,630.6 18.0% 1,679.1 18.8% 1,671.8 13.0% (2.9) 0.4
$9,048.4 $8,920.2 $12,814.0 1.4 (30.4)
Sales by Geographic Area:
Americas ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,028.7 55.6% $5,346.3 59.9% $ 8,746.0 68.3% (5.9)% (38.9)%
EMEA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,997.1 33.1% 2,874.4 32.2% 3,511.6 27.4% 4.3 (18.1)
Asia ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,022.6 11.3% 699.5 7.9% 556.4 4.3% 46.2 25.7
$9,048.4 $8,920.2 $12,814.0 1.4 (30.4)
Consolidated sales for 2003 of $9.05 billion were up slightly by $128 million, or 1.4%, compared to 2002
consolidated sales of $8.92 billion, primarily due to strengthening of the Euro. As discussed above, this Öat
revenue performance is largely indicative of an electronic components and computer products industry that
has stabilized after the precipitous decline midway through 2001. The relatively small growth in sales year-
over-year is largely a result of modest increases in sales within EM and CM oÅset, in part, by declines in sales
within AC.
EM's sales of $4.99 billion in 2003 were up $147 million, or 3.0%, over EM's 2002 sales of $4.84 billion.
The largest growth within EM occurred in the Asia region where EM's 2003 sales were $868 million, up
$273 million, or 45.8%, over 2002 EM Asia sales of $595 million. This growth in Asia is indicative of the trend
whereby technology manufacturing continues to shift to this region of the world, especially in the electronic
component industry in which EM competes. Also impacting EM's net increase in sales year-over-year was the
strength of the Euro in 2003. EM EMEA's sales increased to $1.74 billion in 2003 from $1.57 billion in
2002 Ì an increase of $168 million, or 10.7%. Much of the shift to Asia discussed above continues to come
from the Americas, where EM's 2003 sales of $2.38 billion were down $294 million, or 11.0%, from 2002 EM
Americas sales. EM Americas has also seen more pricing pressure than the other regions as, despite relatively
Öat year-over-year unit volume, average selling prices have declined in 2003. Although this decline in average
selling prices is not expected to be a permanent trend, the most signiÑcant impact during 2003 has been on
IP&E and RF/Microwave products where revenues were down approximately 15% and 12%, respectively.
CM's sales of $2.43 billion in 2003 improved by $30 million, or 1.3%, over CM's sales of $2.40 billion in
2002. Trends in CM's sales are primarily a function of the group's performance in the Americas region, which
has consistently accounted for more than 80% of CM's global sales in recent years. CM Americas sales were
$2.01 billion in 2003, up $72 million, or 3.7%, over 2002 CM Americas sales of $1.94 billion. CM's growth in
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