Post on 03-Jul-2020
Esprinet Group
Corporate Presentation 2014Star Conference - Milan 25-26 March
2
Disclaimer
This Presentation may contain written and oral “forward-looking statements”, which includes statements that do not relate solely to historical or current facts and
which are therefore inherently uncertain. All forward-looking statements rely on a number of assumptions, expectations, projections and provisional data concerning
future events and are subject to a number of uncertainties and other factors, many of which are outside the control of Esprinet S.p.A. (the “Company”). There are a
variety of factors that may cause actual results and performance to be materially different from the explicit or implicit contents of any forward-looking statement and
thus, such forward-looking statements are not a reliable indicator of future performance.
The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise,
except as may be required by applicable law. The information and opinions contained in this Presentation are provided as at the date hereof and are subject to change
without notice. Neither this Presentation nor any part of it nor the fact of its distribution may form the basis of, or be relied on or in connection with, any contract or
investment decision. The information, statements and opinions contained in this Presentation are for information purposes only and do not constitute a public offer
under any applicable legislation or an offer to sell or solicitation of an offer to purchase or subscribe for securities or financial instruments or any advice or
recommendation with respect to such securities or other financial instruments.
Pursuant the consolidated law on financial intermediation of 24 February 1998 (article 154-bis, paragraph 2) Giuseppe Falcone, in his capacity as manager responsible for
the preparation of the Company’s financial reports declares that the accounting information contained in this Presentation reflects the Esprinet’s documented results,
financial accounts and accounting records. Neither the Company nor any member of the Esprinet Group nor any of its or their respective representatives, directors or
employees accept any liability whatsoever in connection with this Presentation or any of its contents or in relation to any loss arising from its use or from any reliance
placed upon it
3
Agenda
Corporate overview
Industry and market scenario
FY 2013 financial highlights and outlook
4
ITALY75%
SPAIN25%
TITOLO DEL GRAFICO
31%
11%
12%11%
9%
7%
5%5%
9%
PC
TABLET
SUPPLIES
CONSUMER ELECTRONICS
SERVER-NETWORKING-
STORAGE
TLC
PRINTER
SOFTWARE
OTHER
RETAILERS22%
CORPORATE DEALERS
72%
OTHERS6%
Corporate Overview
Technology wholesale distributor in Italy and Spain: we buy from technology vendors and we sell to resellers
Sales € 2 billion sales, EBIT € 37 million in 2013
By far #1 in Italy, #3 in Spain(1), ~40,000 customers, 200 suppliers
#5 largest European distributor, in the worldwide ‘Top Ten’(2)
Listed on the Italian Stock Exchange since 2001 (PRT)
(1) Sirmi 2014, Channel Partner 2013 – GTDC Context 2014 (2) Factset estimates 2014
Customer MixProduct Mix (%)
Sales by country(%)
5
Group Structure
Esprinet SpA
100%100%
Esprinet Iberica: IT & CE
distributor in Spain and
Portugal
electrocomponents
distributor in Italy
Esprinet SpA: IT & CE distributor in Italy
Value-Added
Distributor
100%
Dealers’ consortium
cloud service provider
8,33%
6
Established in ‘70s under the name Comprel, semiconductor distributor in Italy
Mid ’80s: start of Celo and Micromax business, Italian IT distributors
2000: merger of Celo, Micromax and Comprel, under the brand-new Esprinet (Italian 2nd largest distributor)
July 2001: Esprinet listed on the Italian Stock Exchange (ipo price: € 1.4 per share)
2002: two acquisitions in Italy (Pisani, Assotrade, € ~300m revenue)
2003: Esprinet to reach the #1 position in the Italian market
End of 2005: acquisition of Memory Set (€ 525m in 2004), 2nd largest IT distributor in Spain
November 2006: acquisition of Actebis in Italy (€ ~130m)
November 2006: acquisition of UMD in Spain (€ 266m in 2005) to create Esprinet Iberica
Mid of 2008: restructuring program of Spanish operations
End of 2009: Spanish turnaround completed – Esprinet Iberica among the top three distributors in Spain
Beginning of 2014 - focusing on core-business: sale of Monclick, e-tailer created in 2005
Corporate milestones
7
7Esprinet position in the IT Supply Chain
Hardware & Software Vendors
IT & Consumer Electronics
Wholesale Distributors
Consumer Oriented Resellers
(Retailers – Computer Shop)
Business Oriented Resellers
(Dealer/VAR/Integrators)
Individuals Small Medium Businesses Govt. / Large Corporations
1st TIER
2nd TIERD
I
R
E
C
T
C
H
A
N
N
E
L
1st TIER
• Direct Channel: from vendors to large corporations/government (15-25% of total addressable market(1))
• 1st tier: from vendors to big resellers (25-35% of total addressable market)
• 2nd tier: from distributors to resellers (~50% of total addressable market)
(1) Company elaboration on FY 2013 Context-GTDC raw
€ 50 billion in Europe(1)
€ 4.7 b in Italy(1)
€ 2.3 b in Spain(1)
8
Clustering customers
Resellers
Dealers
System
integrators
Computer
shops
Business
oriented
Consumer
oriented
VARs
Classification Definition
Supply most of the IT infrastructure needs of mainly the SMB end-users as well
as, for the largest dealers, large accounts and public sector
Hardware/software sales, integration, support and related services to end users
typically make up 100% of their turnover
Companies that normally conduct a core consulting activity that will assess the
broad needs of a corporate client, and implement hardware and software,
including support and maintenance
Revenues are normally 95% from services and 5% from resell
Develop, customise or resell software applications combined with hardware
and related services to form a complete solution
At least 50% of revenues comes from complete solutions
Retailers Include retailers of computer/IT products as well as specialist retail
distributors and merchandisers
Sale of IT goods, from a fixed location and/or from an on-line portal, in small
lots for direct consumption by the purchaser
Others Other categories not included in the previous ones (e.g. mail order)
9
125
9678
31
57
153
56
-4
-68
-3
-43-61
-142
-200
-150
-100
-50
0
50
100
150
200
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
156
120112
88
134
213
112
62
22
129
110103
55
0
50
100
150
200
250
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
6,3 6,3
14
21
27
44
32
24
32
25 2523 23
0
5
10
15
20
25
30
35
40
45
50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
801954
1.215
1.5001.628
2.230
2.430 2.373
2.1192.205
2.0961.932
2.043
0
500
1.000
1.500
2.000
2.500
3.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Key financials highlights(1)
Sales (€/m) Net profit (€/m) (1)
Net Financial Debt(2) (€/m)
1) 2011 Adjusted for Goodwill impairment impact
2) See definition in Financial Statement. The net debt of 2006 includes the acquisition cost + net debt of acquired companies Actebis Italia and UMD SA consolidated since
31.12.2006 without consolidation of P&L but with full consolidation of balance sheet
Net Working Capital(€/m)
10
The Business Model
Low margin – High volume business
Multinational coverage
High speed interaction with customers and vendors
Working Capital control is key for survival and success
Multiple go-to-market routes
• Consumer products on Consumer Customers (Retailers)
• Volume IT products on Business Customers (Resellers)
• «Value» IT products on Business Customers (VARs)
11
Our unique advantage
Very tight cost and working capital control by means of an established «number crunching» culture
Flexibility in responding to vendor and customers needs by means of a proprietary ERP and Web engine
Multidivisional organization to tackle the different needs of our three key business areas
«Vendor Intimacy» at country level by providing intelligence on the market needs thanks to a very broad customer portfolio and sophisticated market intelligence tools
Stable management team to provide consistency in execution and relationship with key partners
12
Agenda
Corporate overview
Industry and market scenario
FY 2013 financial highlights and outlook
13
Market challenges and opportunities arising from disruption
Two unprecedented disruptions occurred…
Financial SystemTechnological Market
MOBILITYFASHION DATACENTER RESILIENCE CONSOLIDATIONRE-THINKING RETAILERS
…creating New Growth Options
New technologies
Cloud
14
8,7%
0,5%
-3,2%
12,9%
3,8%
-12,5%
11,8%
-1,9% -1,8%
9,2%
-4,4%-3,6%
0,2%
-5,6%
2,1%
-2,2%
-0,9%
11,8%
lug-
12
ago-1
2
set-
12
ott
-12
nov-
12
Dec-
12
Jan-1
3
feb-1
3
mar
-13
apr-
13
mag
-13
giu-1
3
lug-
13
ago-1
3
set-
13
ott
-13
nov-
13
dic
-13
European distributors’ market: Panel GTDC(1)
(1) GTDC is an association of technology wholesalers, which includes both public companies (i.e. PRT-IT, IM-US, TECD-US, ARW-US, AVT-US, ALSN-CH, ABE-
PL,) as well as private companies (i.e. WestCoast, active in U.K.). The raw sales data are analysed by the research company Context.
FY 2013 vs 2012
+1%
15
European GTDC(1) distributors’ market: Europe vs Italy
FY 20113
3% ITA
vs +1% EU
-3,6%
1,1%
-4,2%
-13,4%
-6,5%
-2,5%2,6%
-13,1%-8,3%
5,8%
-9,3%
-3,8%
8,8%
-6,6%-7,9%
3,9%
-0,1%-0,9%
3,4%
-8,0%
2,9%
-1,9%
6,5%
24,5%
Jan-1
2
feb-1
2
mar
-12
apr-
12
mag
-12
giu-1
2
lug-
12
ago-1
2
set-
12
ott
-12
nov-
12
Dec-
12
Jan-1
3
feb-1
3
mar
-13
apr-
13
mag
-13
giu-1
3
lug-
13
ago-1
3
set-
13
ott
-13
nov-
13
dic
-13
Total Italy
16
European GTDC distributors’ market: Europe vs Spain
FY 2013
+7% ESP
vs +1% EU
-11,9%
-1,3%
-13,3%
-5,6%
-8,6%
3,3%
-11,6%
1,7%
-24,2%
-6,2%
-17,8%
-7,7%
24,3%
-5,4%-6,7%
5,6%3,2%
-7,6%
3,4%
-15,3%
12,6%
5,8%
19,4%
34,8%
Jan-1
2
feb-1
2
mar
-12
apr-
12
mag
-12
giu-1
2
lug-
12
ago-1
2
set-
12
ott
-12
nov-
12
Dec-
12
Jan-1
3
feb-1
3
mar
-13
apr-
13
mag
-13
giu-1
3
lug-
13
ago-1
3
set-
13
ott
-13
nov-
13
dic
-13
Total Spain
17
Italian Distributors’ Ranking
Source: management’s estimates on Sirmi 2014 data
market share
2011 2012 2013 2011 2012 2013
ESPRINET 1.576 1.503 1.543 23,4% 24,2% 24,8%
COMPUTER GROSS ITALIA 715 721 775 10,6% 11,6% 12,4%
TECH DATA 616 636 657 9,2% 10,2% 10,5%
INGRAM MICRO ITALIA 628 614 575 9,3% 9,9% 9,2%
DATAMATIC 367 374 374 5,5% 6,0% 6,0%
ATTIVA 206 218 245 3,1% 3,5% 3,9%
BREVI 147 135 156 2,2% 2,2% 2,5%
FUTURA GRAFICA 112 102 105 1,7% 1,6% 1,7%
ADVEO ITALIA 59 50 90 0,9% 0,8% 1,4%
ITWAY 68 69 70 1,0% 1,1% 1,1%
EXECUTIVE 64 69 70 0,9% 1,1% 1,1%
IL TRIANGOLO 69 68 67 1,0% 1,1% 1,1%
COMPUTERLINKS 46 53 58 0,7% 0,8% 0,9%
EDSLAN 54 56 57 0,8% 0,9% 0,9%
FOCELDA 51 53 55 0,8% 0,9% 0,9%
COMETA 50 52 53 0,7% 0,8% 0,9%
SIDIN 48 50 51 0,7% 0,8% 0,8%
ICOS 47 49 50 0,7% 0,8% 0,8%
ADL AMERICAN DATALINE 39 43 45 0,6% 0,7% 0,7%
SNT TECHNOLOGIES 49 45 40 0,7% 0,7% 0,6%
Total top 20 5.012 4.958 5.136 74,5% 79,9% 82,4%
Total aggregated market 6.723,7 6.205,0 6.233,4 100,0% 100,0% 100,0%
Var % top 20 -5,3% -1,1% 3,6%
euro million
18
Spanish Distributors’ Ranking
Source: Channel Partner 2013, Ametic, GTDC, management’s estimates
market share
2010 2011 2012 2010 2011 2012
1 Tech Data 772 702 737 13,8% 12,6% 13,2%
2 Ingram Micro 649 620 589 11,6% 11,1% 10,5%
3 Esprinet Iberica 562 520 464 10,1% 9,3% 8,3%
4 Adveo (Adimpo + Spicers) 339 316 416 6,1% 5,7% 7,4%
5 Vinzeo Informatica 421 379 330 7,5% 6,8% 5,9%
6 Arrow (Diasa+Altimate+Mambo) 182 185 250 3,3% 3,3% 4,5%
7 Investronica 258 180 178 4,6% 3,2% 3,2%
8 GTI 153 161 146 2,7% 2,9% 2,6%
9 Teduinsa 285 244 133 5,1% 4,4% 2,4%
10 Afina (Audema - Westcon) 80 91 128 1,4% 1,6% 2,3%
11 MCR Info Electronic 129 126 117 2,3% 2,2% 2,1%
12 Diode 122 97 63 2,2% 1,7% 1,1%
13 Depau Sistemas 56 56 50 1,0% 1,0% 0,9%
14 Activa 2000 51 50 60 0,9% 0,9% 1,1%
15 Megasur 66 45 64 1,2% 0,8% 1,1%
16 UFP (Group) 47 44 53 0,8% 0,8% 0,9%
17 Valorista 35 40 49 0,6% 0,7% 0,9%
18 Inforpor 35 39 40 0,6% 0,7% 0,7%
19 DMI Computer 44 37 46 0,8% 0,7% 0,8%
20 Infortisa 36 36 39 0,6% 0,6% 0,7%
Total top 20 4.323 3.968 3.951 77,4% 71,0% 70,7%
Total aggregated market 5.538 4.728 4.480 100,0% 100,0% 100,0%
Var % top 20 +12,3% -8,2% -0,4%
euro million
19
Agenda
Corporate overview
Industry and market scenario
FY 2013 financial highlights and outlook
20
FY 2013 financial highlights - 1
Sales 2.043.001 100,00% 1.931.900 100,00% 111.101 5%
Cost of sales -1.908.261 -93,40% -1.800.224 -93,18% -108.037 6%
Gross profit 134.740 6,60% 131.676 6,82% 3.064 2%
Sales and marketing costs -36.933 -1,81% -35.348 -1,83% -1.585 4%
Overheads and admin. costs -60.819 -2,98% -59.764 -3,09% -1.055 2%
EBIT 36.988 1,81% 36.564 1,89% 424 1%
Finance costs -2.144 -0,10% -2.765 -0,14% 621 -29%
EBT 34.844 1,71% 33.799 1,75% 1.045 3%
Income tax expenses -11.749 -0,58% -10.081 -0,52% -1.668 14%
Net income 23.095 1,13% 23.718 1,23% -623 -3%
% Var. Var. %(euro/000) FY 2013 % FY 2012
Consolidated sales were equal to € 2,043.0 million showing an increase of +6% (€ 111.1 million) compared to € 1,931.9 million as at 31 December
2012 despite the persistent weak spending in the countries where the Group operates (Italy and Spain).
Consolidated gross profit was € 134.7 million showing a soft growth (equal to 2%, or € 3.1 million), despite a weak IT spending and a tough
competition in the distribution market, compared to the same period of 2012 as a result of higher sales only partially counterbalanced by lower gross
profit margin;
Consolidated operating income (EBIT) as at 31 December 2013, equal to € 37.0 million, shown an increase of +1% compared to 31 December
2012 (€ 36.6 million), with EBIT margin decreasing to 1.81% from 1.89% due to higher operating costs (€ 2.6 million) compared to the same period of
2012;
Consolidated profit before income taxes equal to € 34.8 million, showed an increase of +3% compared to 31 December 2012 thanks to the
reduction of financial costs (€ -0.6 million);
Consolidated net income is equal to € 23.0 million, in reduction of -3% (€ -0.6 million) compared to 31 December 2012
21
FY 2013 financial highlights - 2
Fixed assets 96.753 97.237 54% -484 0%
Operating net working capital 55.329 102.939 58% -47.610 -46%
Other current assets/liabilities -21.537 -9.697 -5% -11.840 122%
Other non-current assets/liabilities -12.371 -11.704 -7% -667 6%
Total assets 118.174 178.775 100% 97.444 55%
ST financial liabilities 38.569 39.800 22% -1.231 -3%
Financial receivables -6.858 -2.940 -2% -3.918 133%
Cash and cash equivalents -176.893 -111.099 -62% -65.794 59%
Derivatives 174 848 -674 -79%
LT Borrowings 3.356 12.291 7% -12.291 -100%
Net financial debt -141.652 -61.100 -35% -83.908 137%
Net equity 259.826 239.875 134% 6.566 3%
Total sources 118.174 178.775 100% -77.342 55%
220%
100%
33%
-6%
-150%
ns
-120%
Var. %
82%
47%
-18%
-10%
100%
(euro/000) 31/12/13 % 31/12/12 % Var.
• Operating net working capital as at 31 December 2013 is equal to € 55.3 million compared to € 102.9 million as at 31 December 2012;
• Consolidated net financial position as at 31 December 2013, positive by € 141.7 million, was compared to a cash surplus of € 61.1 million as at 31
December 2012.
• Such an improvement was due to a decrease of end-period consolidated net working capital which was affected for the foremost by events unrelated with
the average level of capital itself, namely a lower concentration of payments to suppliers in the last part of the year as compared to the previous year
together with an intensive use of ‘without-recourse’ sales of account receivables. Such a program is aimed at transferring risk and reward to the buyer
thus receivables sold are stripped out by balance sheet according to IAS 39. Even considering other technicalities from factoring by means of which to
obtain the result of advancing cash-in of credits on a “no recourse” basis - such as “confirming” in Spain –, the impact on financial debt was € 154 million
as at 31 December 2013 (€ 128 million as at 31 December 2012);
• Consolidated net equity as at 31 December 2013 is equal to € 259.8 million, growing by € 20.0 million compared to € 239.9 million as at 31 December
2012
22
Good results for European distributors in the 4Q2013: massive sales push, namely due to shipments of tablet and Apple iPhone, which has started to be distributed by
wholesalers. The panel (source: GTDC, January 2014) grew by +3% compared to 4Q2012, with Italy and Spain strong overperformers (respectively +10% and +20.5%).
In 2013, the European panel grew by +1%, while Italy +3% and Spain +7% also due to favourable comps
Context’s analysts view particularly positive for Italy and Spain (‘worst was over for Italy and Spain’ source: Context report, December 2013). Other research
companies focused on Italy (source: Sirmi, January 2014) forecast a reduced level of decrease (-1%) compared to what occurred in 2013 (-4%)
In the first two months of current year the European panel grew by +5% compared to 2013, with Italy and Spain still in a positive trend (+9% and +11% respectively).
Results in both countries were positively affected by discontinuities represented by Apple “going indirect” with i-phone distribution along the channel and the
development of the Spanish “open market” in the smartphone segment. Actually, normalised growth should have revealed lower since the scenario of the sector
doesn’t appear as fully normalised
Even in 2014 accurate credit policy and careful investments will be crucial to manage the trade-off between growth and revenue’s quality, as well as managing the
compromise between average level of stock and availability’s index necessary to be supported by key vendors
Beginning of 2014 indicates a positive consolidated revenues’ trend, although Esprinet Iberica’s lack of contribution. Nonetheless, margin are still under pressure partly
due to a less favourable mix which is counterbalanced by sales growth.
In the current year further solutions and platforms will be rolled out to develop a more efficient pricing discipline and time-to-market capacity as management’s
strategy is highly focused on core-business and internal procedures’ optimization
Further booster will be the distribution of a wider product range, even in market categories adjacent to what historically distributed, namely in the accessory and
‘value’ area, reinforcing the vertical and specialized sales-arms
Moreover, the Esprinet Group will go on monitoring the potential of Cloud Computing phenomenon, nowadays a reality even in Italy, orienting to a cloud proposal in
line with its know-how and key capabilities in a “business system” currently under-redefinition
Outlook 2014
23
Contacts
Esprinet Spa
via Energy Park 20 – Edificio 4
20871 –Vimercate (MB) Italy
www.esprinet.com
IR
Michele Bertacco
IR Director +39 02 40496.1
michele.bertacco@esprinet.com
investor.esprinet.com