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Table of Contents
TS sales of $10.36 billion for fiscal 2013 decreased 3.8% from the prior year sales of $10.77 billion . Organic revenue declined 8.3%
year
over year in constant dollars primarily due to weaker sales in the western regions. In the Americas region, year-over-
year organic sales decreased
8.5% , and sales in EMEA decreased 11.7%
in constant currency. On a product level, declines in servers and hardware were partially offset by
growth in storage, services, and software.
Fiscal 2012 Comparison to Fiscal 2011
The table below provides the comparison of reported fiscal 2012 and 2011
sales for the Company and its operating groups to organic sales
(as defined previously) to allow readers to better assess and understand the Company’s revenue performance by operating group.
Consolidated sales for fiscal 2012 were $25.71 billion , a decrease of 3.1% , or $826.9 million
, from the prior year consolidated sales of
$26.53 billion . Organic sales (as defined earlier in this MD&A) decreased 4.4%, which was primarily due to a double-
digit decline in the EMEA
region in both operating groups.
EM sales of $14.93 billion for fiscal 2012 decreased 0.9% from the prior year sales of $15.07 billion
. EM organic revenue in constant
currency decreased 6.0% year over year due to the combination of exceptionally high growth in fiscal 2011 driven by the V-
shaped recovery in
electronic components, which led to negative organic growth in EM for fiscal 2012. On a regional basis, EMEA experienced double-digit, year-
over-
year revenue declines for both organic and reported revenue, as a result of weaker demand amid concerns surrounding economic conditions
in Europe. Asia organic revenue declined 7.5 %, primarily due to slowing growth in China, and sales in the Americas were flat as compared with
fiscal 2011.
TS sales of $10.77 billion for fiscal 2012 decreased 6.1% from the prior year sales of $11.47 billion . The year-over-
year revenue decrease
was due primarily to the Americas and EMEA regions, which were down 9.1% and 10.4%, respectively, partially offset by growth of 17.6% in
Asia. Organic revenue decreased 1.7% year over year primarily due to EMEA, which decreased 12.7% and 11.4% in constant currency. The
double-
digit decline in EMEA was due to weaker demand in Europe due primarily to the macroeconomic environment previously mentioned.
The organic decline in EMEA was mostly offset by an increase of 11.5% in Asia and 1.7% in the Americas. On a product level, software and
services experienced strong double-digit growth year over year and storage, processors and other hardware also grew year over year.
Gross Profit and Gross Profit Margins
Consolidated gross profit in fiscal 2013 was $2.98 billion , a decrease of $70.8 million , or 2.3%
, from the prior year and a decrease of
7.0% on an adjusted basis in constant currency. Gross profit margin of 11.7% decreased 17
basis points over the prior year. EM gross profit
margin declined 52
basis points year over year primarily related to declines in gross margins in the EMEA region and a higher mix of revenues
from the lower gross profit margin Asia region. The decline in EMEA gross margin was primarily due to the effects of market pressures
associated with relatively short product lead times. With respect to regional mix, the Asia region contributed 38%
of EM sales in the current year
from 34%
in the prior year, attributable to higher growth rates in Asia, the effects of the acquisition of Internix, Inc. in Japan, and lower growth
rates in the western regions.TS gross profit margin improved 24
basis points year over year, primarily driven by the Americas and EMEA offset
by a decrease in Asia. These increases were driven primarily by the revenue mix of higher margin products and services.
Consolidated gross profit in fiscal 2012 was $3.05 billion , a decrease of $57.2 million , or 1.8%
, from the prior year and decreased 4.0%
on an adjusted basis in constant currency. Gross profit margin of 11.9%
improved 16 basis points over the prior year. EM gross profit margin
was down 38 basis points year over year, with all three regions experiencing declines. The Americas region was impacted by the transfer of the
lower gross margin Latin America commercial components business from TS Americas to EM Americas at the beginning of fiscal 2012. In
addition, the regional mix of business was slightly more skewed to the lower
21
Sales as
Reported
Acquisition
Sales
Organic Sales
2012 to 2011
Change
(Dollars in millions)
EM
$
14,933.1
$
211.2
$
15,144.3
(6.3
)%
TS
10,774.4
137.8
10,912.2
(1.7
)
Fiscal 2012
$
25,707.5
$
349.0
$
26,056.5
(4.4
)
EM
$
15,066.2
$
1,092.3
$
16,158.5
TS
11,468.2
(365.4
)
11,102.8
Fiscal 2011
$
26,534.4
$
726.9
$
27,261.3