Avnet 2005 Annual Report Download - page 24

Sales
The tables below provide a year-over-year summary of sales for the Company and its operating groups:
Three-Year Analysis of Sales: By Operating Group and Geography
Years Ended Percent Change
July 2, % of July 3, % of June 27, % of 2005 to 2004 to
2005 Total 2004 Total 2003 Total 2004 2003
(Dollars in millions)
Sales by Operating Group:
EM ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 6,259.0 56.6% $ 5,892.4 57.5% $4,988.4 55.1% 6.2% 18.1%
TS ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,807.8 43.4 4,352.3 42.5 4,060.0 44.9 10.5 7.2
$11,066.8 $ 10,244.7 $9,048.4 8.0 13.2
Sales by Geographic Area:
AmericasÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 5,804.9 52.4% $ 5,409.6 52.8% $5,028.7 55.6% 7.3% 7.6%
EMEA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,669.8 33.2 3,380.2 33.0 2,997.1 33.1 8.6 12.8
Asia/Pacific ÏÏÏÏÏÏÏÏÏÏ 1,592.1 14.4 1,454.9 14.2 1,022.6 11.3 9.4 42.3
$11,066.8 $ 10,244.7 $9,048.4 8.0 13.2
Avnet's consolidated sales in fiscal 2005 were $11.07 billion, up $822 million, or 8.0%, over fiscal 2004
consolidated sales of $10.24 billion. On a per week basis, to normalize the impact of the extra week in fiscal
2004, sales were up 10.1% in fiscal 2005 compared to fiscal 2004. Fiscal 2005 sales were the highest for Avnet
since fiscal 2001 Ì the year in which the multi-year downturn in the electronic components and computer
product industry began. Management estimates that the translation impact of changes in foreign currency
exchange rates contributed approximately $250 million of this year-over-year increase in sales. As indicated in
the table above, the year-over-year growth rate occurred in both operating groups. EM's sales growth was not
as significant as in the prior year due to the adverse impact of the previously discussed mid-cycle inventory
correction, particularly in the first half of fiscal 2005. However, TS posted year-over-year sales growth of
10.5%. Avnet's sales also grew in all three global regions in which it does business.
EM recorded sales of $6.26 billion in fiscal 2005, up $367 million, or 6.2%, over EM's fiscal 2004 sales of
$5.89 billion. Approximately $150 million of this year-over-year growth is estimated to have resulted from the
translation impact of changes in foreign currency exchange rates. EM Americas was again EM's largest region
based on sales. EM Americas fiscal 2005 sales were $2.53 billion, up $69 million, or 2.8%, over fiscal 2004
sales of $2.46 billion. The mid-cycle inventory correction resulted in sequential quarterly revenue declines for
EM Americas in the first half of fiscal 2005. However, this impact was more than offset by growth in EM
Americas' sales in the second half of the year as the region saw increasing demand and a pickup in booking
trends as the year progressed. EM Asia posted the most significant growth in sales for EM, which were
$1.36 billion, up $62 million, or 4.8%, over fiscal 2004 sales of $1.30 billion. This growth yielded EM Asia's
seventh consecutive record for annual sales. More importantly, the positive growth trend in Asia is
encouraging as this region was the first to feel the negative impact of the mid-cycle inventory correction and
also appears to have been the first region to positively emerge from this trend during fiscal 2005. EM's EMEA
operations yielded the largest year-over-year percentage increase in sales of 11.0% (from $2.13 billion in fiscal
2004 to $2.37 billion in fiscal 2005), although EM EMEA was also the most positively impacted by the
translation impact of changes in foreign currency exchange rates due to the strengthening of the Euro,
particularly in the first half of fiscal 2005. As a result, management estimates that over 60% of this year-over-
year growth in EM EMEA is a result of the translation impact of changes in foreign currency exchange rates.
The remaining growth in EM EMEA's sales is less than in the other regions for EM as the electronic
components industry in the EMEA region continues to be impacted by softer demand than the other regions.
However, EM EMEA also began to show improved trends in bookings near the end of fiscal 2005.
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