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Table of Contents
beginning of fiscal 2007. 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 the prior year,
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 sales
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 continued 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 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.
Gross Profit and Gross Profit Margins
Consolidated gross profit for fiscal 2009 was $2.02 billion, down $290.7 million, or 12.6%, over the prior year
primarily due to the decline in revenue. Gross profit margin of 12.5% declined 43 basis points over prior year. For
EM, gross profit margin was down 74 basis points year over year as it was negatively impacted by the combination
of a regional mix shift to Asia, which represented 31% of EM sales as compared with 28% in the prior year, and
lower margins in the Americas region. TS gross profit margin was up 10 basis points year over year as the EMEA
region’s improvement was mostly offset by declines in the Americas and Asia regions.
Consolidated gross profit was $2.31 billion in fiscal 2008, a $265.1 million increase, or 12.9%, as compared
with fiscal 2007. This increase was primarily due to the impact of acquisitions and the year-over-year weakening of
the US dollar against the Euro. Consolidated gross profit margin of 12.9% in fiscal 2008 decreased 17 basis points
from the prior year due primarily to slightly lower margins at TS and the mix of business between EM and TS
described below. The EM Asia business continued to grow faster than the Americas or EMEA regions, and although
the EM Asia business has relatively lower gross profit margin than the other regions, EM’s gross profit margin
increased 15 basis points over prior year. TS gross profit margins declined 9 basis points year over year. In addition,
as a result of the acquisitions in fiscal 2008, TS sales grew to 42% of the consolidated sales as compared with 38% of
the consolidated sales in fiscal 2007. Because the TS business typically yields lower gross margins relative to the EM
business, the larger representation by TS in the consolidated sales also has a negative impact on the
20
Gross to Net
2008 to 2007
Sales as
Acquisition
Revenue
Pro Forma
Pro Forma
Reported
Sales
Impact
Sales
Change
(Dollars in millions)
EM
$
10,326.8
$
187.5
$
—
$
10,514.3
5.0
%
TS
7,625.9
206.7
—
7,832.6
4.7
Fiscal 2008
$
17,952.7
$
394.2
$
—
$
18,346.9
4.9
EM
$
9,679.8
$
332.0
$
—
$
10,011.8
TS
6,001.3
1,694.0
(214.4
)
7,480.9
Fiscal 2007
$
15,681.1
$
2,026.0
$
(214.4
)
$
17,492.7