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Esprinet Group: the European technology wholesale distributor

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Presentation on theme: "Esprinet Group: the European technology wholesale distributor"— Presentation transcript:

1 Esprinet Group: the European technology wholesale distributor

2 Index The Esprinet Group The market In Italy In Spain
The business model Esprinet product marketing The sales force The customers The service division The logistics Esprinet Italy Esprinet Iberica

3 Index The Esprinet Group The market In Italy In Spain
The business model Esprinet product marketing The sales force The customers The service division The logistics Esprinet Italy Esprinet Iberica

4 Multinational distributor of technology to resellers
Group Overview Multinational distributor of technology to resellers . € 2.37 billion of sales, net income €24.3 million in No.1 in Italy(1) (75% of group sales),within the top 3 in (25% of Group Sales) . Largest vendor portfolio as well as customer base within the peers(2) . Competitive advantage based on unique internet-based business model . Superior profitability and return on capital employed(3) . A committed management team with a consistent track record (1) Source: Sirmi 2008, Business Publications Spain 2007 (2) Source: Company data, as per both Italian and Spanish market (3) Source: IMI, 2008

5 Group Structure Esprinet SpA IT & CE Wholesaler
Esprinet Iberica (100%) Spanish IT & CE Wholesaler Monclick (100%) B2C E-tailer IT& Consumer Electronics Comprel (100%) B2B Electronic Components Distribution

6 Geographical coverage
Esprinet Iberica Zaragoza (Spain) Esprinet Italy Milan (Italy)

7 Key financials highlights(1)
EBIT (€/000) Net Financial Debt (2) vs Net Equity (m€) Acquisition of Memory Set Acquisition of UMD and Actebis Acquisition of Pisani and Assotrade IFRS-International Financial Reporting Standards since fiscal year 2004 See definition in Financial Statement. The net debt of 2006 includes the acquisition cost + net debt of acquired companies Actebis Italia and UMD SA, which have been consolidated since without consolidation of P&L but with full consolidation of Balance sheet.

8 The business model that drives higher margins and lower costs

9 Esprinet Corporate Organizational Structure

10 Esprinet Italy Organizational Chart

11 Italian Top Wholesalers: Esprinet is the No. 1
Increasing the relative market share: a clear No.1 Source: Sirmi, January 2009

12 An undisputed leadership
Var. % 2008 Revenues Source: Sirmi, January 2009

13 2007 top Spanish distributors
*2004 figures are related to Memory Set, acquired in December are pro-forma sales, including UMD, acquired in December 2006 Source: Business Publications Spain 2007, Channel Partner 2008, IT Europa 2007

14 2007 European ranking: top 4 players
Source: IMI, March 2008 (all data in m€)

15 Index The Esprinet Group The market In Italy In Spain
The business model Esprinet product marketing The sales force The customers The service division The logistics Esprinet Italy Esprinet Iberica

16 The Market

17 IT Addressable market: size and trends
2008 IT addressable market: €13.6bn Italy / €9.3bn Spain Total market (incl. IT serv. & app. SW): €24.0bn Italy / €15.0bn Spain 1ST - TIER DISTRIBUTION Hardware & Software Vendors DIRECT SALES 2nd - TIER DISTRIBUTION IT Wholesale Distributors €5.0 b Spain €7.1b Italy €2.1b Spain € 3.5b Italy 53% of total 52% of total IT Resellers: Consumer Oriented and Business Oriented €2.3 b Spain Retailers/Computer shop Dealers/VAR/System Integrator €3.0b Italy Individuals Small Medium Businesses Govt. / Large Corporations 17

18 The Italian Market: a fragmented and complex reality
The Italian market is one of the most fragmented in Europe, featuring a huge number of SME. There are around small-medium sized companies in Europe of which 26% are in Italy. More than of these have less than 10 employees. N° of EMPLOYEES INDUSTRY BUSINESS SERVICES FINANCE GOVERNMENT TOTAL < 50 1,152,118 1,600,530 1,064,024 116,572 777,579 4,710,823 51-249 14,372 3,179 6,735 1,114 14,712 40,112 250+ 1,634 250 1,012 160 1,645 4,701 1,168,124 1,603,959 1,071,771 117,846 793,936 4,755,636 Over IT and Consumer Electronic Retailers in Italy Considerable complexity in terms of : - Number of employees (from ‘one man company’ to a complex organization) Revenue (from € to ml of €) Source Sirmi 2005

19 2007- 2009 Italian Market 2007 2008 2009E M € IQ IIQ IIIQ IVQ Totale
Hardware 2.245,8 2.173,7 1.790,2 2.975,3 9.185,0 2.315,5 2.275,5 1.791,3 2.718,7 9.101,0 2.281,3 2.244,7 1.780,9 2.670,1 8.977,0 Software 1.035,5 1.049,8 839,0 1.115,3 4.039,6 1.078,6 1.099,4 881,6 1.105,4 4.165,0 1.086,0 1.133,3 907,0 1.168,7 4.295,0 Development Services 1.115,1 1.141,9 1.121,3 1.142,7 4.521,0 1.149,5 1.185,8 1.154,7 1.090,0 4.580,0 1.133,5 1.214,8 1.194,7 1.143,0 4.686,0 Managing Services 1.434,1 1.443,8 1.426,5 1.443,2 5.747,6 1.457,2 1.467,4 1.450,7 1.424,7 5.800,0 1.452,5 1.470,2 1.460,3 1.481,0 5.864,0 Total IT 5.830,5 5.809,2 5.177,0 6.676,5 23.493,2 6.000,8 6.028,1 5.278,3 6.338,8 23.646,0 5.953,3 6.063,0 5.342,9 6.462,8 23.822,0 Total TLC 10.274,8 10.274,9 10.341,9 10.525,4 41.417,0 10.251,4 10.405,1 10.311,5 10.516,0 41.484,0 10.250,4 10.417,9 10.370,8 10.665,9 41.705,0 Total ICT 16.105,3 16.084,1 15.518,9 17.201,9 64.910,2 16.252,2 16.433,2 15.589,8 16.854,8 65.130,0 16.203,7 16.480,9 15.713,7 17.128,7 65.527,0 Total CE 2.066,9 2.350,1 1.734,6 2.899,4 9.051,0 2.213,3 2.483,0 1.829,5 2.678,2 9.204,0 2.232,7 2.517,3 1.859,0 2.723,0 9.332,0 2007 2008 2009E M € IQ IIQ IIIQ IVQ Totale Hardware 24,5% 23,7% 19,5% 32,4% 100,0% 25,4% 25,0% 19,7% 29,9% 19,8% 29,7% Software 25,6% 26,0% 20,8% 27,6% 25,9% 26,4% 21,2% 26,5% 25,3% 21,1% 27,2% Development Services 24,7% 24,8% 25,1% 25,2% 23,8% 24,2% 25,5% 24,4% Managing Services 24,6% 24,9% Totale IT 22,0% 28,4% 22,3% 26,8% 22,4% 27,1% Totale TLC Totale ICT 23,9% 24,0% 26,1% Totale Consumer Electronics 22,8% 19,2% 32,0% 27,0% 19,9% 29,1% 29,2% Source: SIRMI SPA – January 2009

20 2007 2009 Italian Market: hardware and software figures
2008 2009E M € IQ IIQ IIIQ IVQ Totale Large Systems 40,0 38,0 51,0 81,0 210,0 35,5 43,0 58,5 180,0 32,5 40,5 41,0 57,0 171,0 Sistemi 81,4 91,6 73,4 125,5 371,9 78,0 87,9 64,4 98,9 329,2 70,7 82,7 64,3 85,1 302,8 Workstation 1,6 1,9 1,3 6,7 1,1 1,4 5,1 1,0 4,3 PC 1.020,0 928,0 737,0 1.233,0 3.918,0 1.016,0 926,0 732,0 1.159,0 3.833,0 1.023,0 896,0 710,0 1.041,0 3.670,0 Stampanti 218,0 196,0 175,0 279,0 868,0 227,0 209,0 181,0 238,0 855,0 222,0 202,5 183,0 231,5 839,0 Storage 108,2 103,5 97,8 159,5 469,0 110,1 114,5 94,1 122,3 441,0 100,0 110,0 92,0 115,0 417,0 Networking hardware 234,9 252,1 212,9 266,3 966,2 251,4 269,0 228,8 265,8 1.015,0 254,1 276,2 240,7 292,0 1.063,0 Altro 541,7 562,6 441,8 829,1 2.375,2 596,2 624,8 446,9 774,8 2.442,7 577,9 635,7 448,9 847,4 2.509,9 Totale Hardware 2.245,8 2.173,7 1.790,2 2.975,3 9.185,0 2.315,5 2.275,5 1.791,3 2.718,7 9.101,0 2.281,3 2.244,7 1.780,9 2.670,1 8.977,0 2007 2008 2009E M € IQ IIQ IIIQ IVQ Totale System Software 119,9 112,8 91,5 138,8 463,0 127,5 122,7 104,4 125,4 480,0 129,0 125,3 107,0 132,0 493,3 Middleware e Tools 532,0 569,7 419,6 605,3 2.126,6 562,5 603,5 444,1 614,9 2.225,0 575,0 630,0 662,7 2.330,7 Applicativo 383,6 367,3 327,9 371,2 1.450,0 388,6 373,2 333,1 365,1 1.460,0 382,0 378,0 337,0 374,0 1.471,0 Totale Software 1.035,5 1.049,8 839,0 1.115,3 4.039,6 1.078,6 1.099,4 881,6 1.105,4 4.165,0 1.086,0 1.133,3 907,0 1.168,7 4.295,0 End User Cost in milions of Euros Source: SIRMI SPA – January 2009

21 The Italian Strategy: Organic Growth Opportunities
Customers Keep on addressing the “Long Tail of Customers” by means of our internet strategy, therefore growing sales and margins Focus on “professional installers”, resellers in adjacent industries that are now potential buyers of IT&CE products (i.e. tv installers, antitheft system installers etc.) Products Sell “contiguity products”, that is products that are changing their technical/economical life cycle the like of videosurveillance systems, hybrid IP phone systems etc. Address the theoretically un-addressable market of services by means of an innovative methodology of service delivery name-coded “Serviceland” Processes Further focus on sales processes redesign, relying heavily on IT and Web programming, having in mind both sales innovation and continuous drive to reduce costs Electronic Components Grow the high margin Electronic Components business and focus more and more on adjacent professional markets the like of subsystems

22 Esprinet Group Financial Results as of 31 December 2008

23 Group financial highlights as of 31 December 2008
Sales were € 2,373.3m (-2%) Italian sales: € 1,781.2m (-1% versus 2007) Spanish sales: € 592.0m (-6%) Gross profit was €142.6m (-7%) Italian gross profit: € 125.4m (6.87% on sales from 6.90% of 2007) Spanish gross profit: € 17.2m (2.90% on sales versus 4.23% of 2007) EBIT was € 48.2m (-28%) In Italy € 56.5m (3.09% on sales from 3.34% of 2007) In Spain negative by € -8.3m (0.74% on sales from 1.01% of the previous year). Net of ‘not-recurring’ charges, in the fourth quarter Esprinet Iberica returned to a positive EBIT of € 1.6 million Net financial debt showed a cash surplus of 10.0 million, with an improvement of €65.7 m from a level of €55.7m of financial indebtedness as of December 31st 2007 WC on sales equal to € 57m (2% of sales) reducing by €55.0 m In Italy WC end of December 2008 was € 18.4m (1% on sales) In Spain WC was € 38.6m (6% on sales) with 65.1m reduction as compared to 2007

24 2009 Outlook Current fiscal year will be one of the toughest since a long time Group completed several actions along the year aimed at responding to the risk in reducion in volumes of activities though the lowering of operating break-even point- especially at Esprinet Iberica’s level – which ended up the shutdown of Bilbao office Reinforced initiatives to minimize capital needs Group benefitted from the positive outcome of negotiations with banks supporting credit facilities and restoring the desired levels of both financial stability and flexibility

25 Index The Esprinet Group The market In Italy In Spain
The business model Esprinet product marketing The sales force The clients The service division The logistics Esprinet Italy Esprinet Iberica

26 Esprinet’s business model

27 Go-to-market Internet Large Enterprise System Integr External People VAR Public Administration Sales Specialist SW House Internal People SME Dealer 14 Cash & Carry End User Supermarket Merchandiser Small shops/ Franchising shops Label Advertising Re-definition of needs and orders from the end-users drives the need to re-consider the go-to-market model Total number of companies in Italy: <50 employees = 4,710,823 >50 employees = 44,813

28 Go-to-market - Internet
Seize the customers when they “sell” and not when they “buy” in other words help the customers sell before they buy The site’s 10° year anniversary was celebrated on July 4° 2006

29 Esprinet Web Site Numbers
ITALY SPAIN 2008 2007 Change Site acceses -18,80% 4,04% Web Orders (Volume) -2,32% 22,44% Web Orders (Amount) -1,58% 2,31% % Web Orders (Amount) 51,39% 51,89% -0,50% 30,28% 34,66% -4,37% % Web Orders (Volume) 76,19% 77,79% -1,60% 66,73% 63,95% 2,79% Credit Card Amount WebOrders 14,60% 755,84% Credit Card Volume WebOrders 65.614 54.776 19,79% 8.550 1.042 733,46% Clients with at least one Access 35.545 34.858 1,97% 17.401 26.847 -35,18% Clients with at least one Weborder 24.126 23.390 3,15% 12.845 16.188 -20,65% Italy 2008 working days : 253 Italy 2007 working days : 253 Spain working days : 254 Spain 2007 working days : 258

30 The Esprinet Web Site: the market standard for technology resellers
Product availability in real time, information on delivery with SMS updates Detailed product data sheets that include every option, accessory and complementary product. Cross-selling “intelligent” system Multiple product research possibilities (type, multilevel, advanced, textual, per product and accessory/supplies research) On line service tracking of orders and returns Financial profile under control Personalized promotions and discounts Possible downloading of price lists, product data sheet and invoices System capable of confirming, modifying and cancelling orders End-users receive offers through an automatic alert system in cases where there are price changes, obsolete products or product depletion Dedicated area to supply products, digital products, game products and at the cash & carry Technical forums and live-web conferences Amerigo, navigator software in order to support clients in buying multi-licences Editable web-mailing

31 Index The Esprinet Group The market The business model
In Italy In Spain The business model Esprinet product marketing The sales force The customers The service division The logistics Esprinet Italy Esprinet Iberica

32 Esprinet product marketing

33 Push on sales and ‘short circuit’ clients through the web
Product Marketing Request: Fast Market Response: Time to Market = 0 Tool: Various Organizational Classical Solution Esprinet Solution Product Marketing Product Marketing Sales Sales Client Client Next to a well articulated Sales Structure there is a Product Marketing division subdivided into Business Units with 2 main priorities : Push on sales and ‘short circuit’ clients through the web Nearly 100 professionals divided into 22 B.U. to serve different merchandising categories B.U. focused on the main traditional IT brands New B.U. focused on BIT Technology brands (digital solutions, luxury, e-domestic, games) They manage the margins and the warehouse stock, update the product data sheets on the web, plan co-marketing activities and maintain relations with the Vendors They are in charge of the Revenue Margin Debt

34 Product Marketing

35 Merchandising categories
Business Units B.U. Merchandising categories n. brand trattati BU HP PC, notebooks, servers, storage, hp services, workstations, organizers, monitors, accessories, printers, plotters, scanners, videoprojectors, printing solutions 11 BU Acer notebooks, PC’s, monitors,videoprojectors, servers, organizers, satellite navigators 3 BU IBM servers, workstations, storage, notebooks, PC’s, monitors, accessories, videoprojectors  4 BU Components  cabinets, PC semi-assembled, sound cards, optical storage, MP3, motherboards, hard disks, storage, microprocessors, vga cards, bags, navigators, mouse, keyboards 42  BU Networking routers, switches, wireless, video surveillance, VOIP, storage, UPS   24 BU Periferiche Monitors, videoprojectors, printers, scanners 25 BU Software Software, CD, box, multi-licences  29 BU Value Storage, backup software, servers, blade server solutions, networking solutions, software solutions 9

36 Business Units B.U. Product Categories n. brands BU Digital Home
Photocameras, videocameras, camera lens, films, memory cards, hard disks, photograph printers, car radios, car audio, digital terrestrial decoders, DVD’s, Home Theatre, Hi-Fi, TV (plasma. LCD & Crt), sintoamplificators, speakers, videoprojectors h.c. tv lcd, tv plasma, fotocamere digital compatte e reflex, videocamere, lenti, portafoto digitali, car audio,  home theatre, dvd, digitali terrestri, hi fi 50 BU Fujitsu Siemens notebooks, PC, servers, monitors, organizers, accessories, cordless 4 BU Telefonia mobile phones, smart phones and cordless 33 BU P/G Household appliances Small and large household appliances 43 BU Luxury suitcases, pens, gift articles 13 BU Office notebooks, printers, photocopiers, multifunction, faxes, duplicators, document shredders, cutters, calculators, plotters, scanners  25 BU Supplies supplies  64 BU Toshiba Notebooks, accessories, service (guarantee extensions) 1 BU Games console games, controller games, videogames  27

37 Product Marketing – Brand
Hardware

38 Product Marketing - Brand
Networking

39 Product Marketing - Brand
PC Components

40 Product Marketing - Brand
Audio-Video

41 Product Marketing - Brand
GPS Systems/Telecoms

42 Product Marketing - Brand
Photo/Video

43 Product Marketing - Brand
Peripherals and Office Equipments

44 Product Marketing - Brand
Software

45 Product Marketing - Brand
Consumables

46 Product Marketing Luxury

47 Product Marketing E-domestic

48 Product Marketing Games


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