Avnet 2008 Annual Report Download - page 23

Table of Contents
Items Impacting Fiscal 2007 Sales Comparison to Fiscal 2006
The following table provides a comparison of reported sales for fiscal 2007 and fiscal 2006 to pro forma sales
which are adjusted for (i) acquisitions completed in fiscal 2007 as if the acquisitions had occurred at the beginning of
fiscal year 2006, (ii) divestitures completed in fiscal 2006 as if the divestitures had occurred at the beginning of fiscal
2006 and (iii) the change to net revenue reporting as if the change had occurred at the beginning of fiscal 2006. The
pro forma sales information allows readers to better assess and understand the Company’s revenue performance on a
more comparable basis.
Avnet’s consolidated sales in fiscal 2008 were $17.95 billion, up $2.27 billion, or 14.5%, over prior year. As
previously discussed, the sales growth was driven primarily by acquisitions and the weakening of the US Dollar
against the Euro as an estimated $674 million of the increase in sales was attributable to the translation impact of
changes in foreign currency exchange rates. On a pro forma basis, consolidated sales and sales for EM and TS were
roughly 5% higher year over year.
EM generated fiscal 2008 sales of $10.33 billion; representing a 6.7% increase over fiscal 2007 sales. Excluding
the translation impact of changes in foreign currency exchange rates, EM fiscal 2008 sales increased 2.5% over the
prior year. On a pro forma basis, EM sales increased 5.0% over fiscal 2007. EM Americas year-over-year growth
was 1.3% while the EMEA region sales were up 9.8% year over year and down 2.2% excluding the translation
impact of changes in foreign currency exchange rates. Sales growth in Asia was 10.3% year over year and 7.1% on a
pro forma basis. The Asia region continues to experience the highest growth rate among the three regions.
TS reported sales of $7.62 billion for fiscal 2008, up $1.62 billion, or 27.1%, compared with fiscal 2007 sales of
$6.00 billion. Excluding the positive translation impact of changes in foreign currency exchange rates, TS sales were
up 22.6% year over year. On a pro forma basis, TS sales grew 4.7% over prior year. At a regional level, sales in the
Americas region were up 17.1% year over year on a reported basis and up 1.2% on a pro forma basis as growth in
storage and networking offset declines in proprietary servers. In EMEA, sales were up 47.3% on a reported basis and
up 9% on a pro forma basis. In Asia, sales growth was 54.6% year over year on a reported basis which benefited by
acquisitions. On a pro forma basis, Asia grew 20.6% over prior year, impacted by relatively weak microprocessor
and memory product sales in the last quarter of fiscal 2008.
Avnet’s fiscal 2007 sales were $15.68 billion, a $1.43 billion increase, or 10.0%, over fiscal 2006 consolidated
sales of $14.25 billion. Growth occurred in all three geographic regions and in both operating groups during fiscal
2007. Of the $1.43 billion year-over-year increase, approximately $340 million was a result of the translation impact
of changes in foreign currency exchange rates. More than half of the reported sales growth was attributable to the
Access and Azure acquisitions. As presented in the preceding tables, the comparison of fiscal 2007 sales to prior year
were also impacted by acquisitions, prior year divestitures and the change to net revenue reporting. When the impacts
of these items are considered in both fiscal 2007 and 2006, consolidated sales growth would have been 5.7%. Both
EM and TS contributed to the year-over-year improvement in sales. Specifically, fiscal 2007 sales for EM were
$9.68 billion, up $417.4 million, or 4.5% over fiscal 2006. Fiscal 2007 sales for TS were $6.00 billion, up
$1.01 billion, or 20.2%, as compared with sales of $4.99 billion for fiscal 2006. Including Access and Azure in the
periods prior to the acquisition dates and including the change to net revenue reporting for periods prior to third
quarter of fiscal 2007, TS year-over-year sales growth would have been 5.5%.
20
Gross to Net
2007 to 2006
Sales as
Acquisition
Divested
Revenue
Pro Forma
Pro Forma
Reported
Sales
Sales
Impact
Sales
Change
(Dollars in millions)
EM
$
9,679.8
$
—
$
—
$
—
$
9,679.8
5.9
%
TS
6,001.3
994.9
—
(
214.4
)
6,781.8
5.5
Fiscal 2007
$
15,681.1
$
994.9
$
—
$
(
214.4
)
$
16,461.6
5.7
EM
$
9,262.4
$
—
$
(
122.7
)
$
—
$
9,139.7
TS
4,991.2
1,939.2
(112.5
)
(387.3
)
6,430.6
Fiscal 2006
$
14,253.6
$
1,939.2
$
(235.2
)
$
(387.3
)
$
15,570.3