The Channel logo


By | Paul Kunert 4th March 2013 14:17

Tech Data pops champers, aims to rinse nasty FY '13 aftertaste

Bottle slips from nerveless hands after financials seen

The CEO of Tech Data won't be sad to kiss goodbye to a "challenging" fiscal 2013 disrupted by falling enterprise kit sales, an SAP upgrade and a shift in the way it reports services turnover.

The broadline behemoth today reported a four per cent fall in revenues for the year ended 31 January to $25.3bn - down ten per cent in the US to $10.8bn and one per cent in Europe to $15.5bn.

At the start of fiscal 13, Tech Data overhauled the way it presents vendor warranty services and certain other fulfilment contracts to net sales - the impact on the year was to reduce sales by $846m.

Net income edged up 3.8 per cent to $214.6m versus $206.4m, but operating profit for the year shrank by 7.5 per cent to $303.2m from $327.9m a year earlier.

Tech Data managed to wipe out more than $60m-worth of cost in the year, with selling, general and administrative overheads down to just over £1bn.

The 'other expenses' bracket, namely the costs associated with buying SDG, climbed to $7m, up from $1.2m.

The distie giant did however end fiscal 2013 on a high with Q4 sales up five per cent to $7.463bn including a $623m top line contribution from SDG's operation in Europe. Operating profit climbed to $93.5m compared to $83.8m.

Sales in Europe bounced 12 per cent to $4.9bn, but this included the SDG number and $137m of vendor warranty sales. Excluding these the growth was a more modest two per cent. Operating income in the region fell to $58.8m from $59.8m.

The business in North America fared worse, with turnover down six per cent on the same period a year ago to $2.6bn, though operating profit grew to $38.3m from $26.7m.

CEO Bob Dutkowsky said fiscal 2013 was both a "dynamic and a challenging year" for the company following a strong commercial outing in the previous twelve months.

"We entered the year against a backdrop of continued economic uncertainty and a cautious IT spending environment," he said.

"As the year progressed, we faced what is arguably one of the IT industry's most rapid product mix shifts - away from higher-margin products such as servers, to lower-margin products such as tablets, mobile phones and software, as well as a shift in our vendor concentration," said Dutkowsky.

"Adding to the disruption, the implementation of certain modules of our SAP system in the US caused us to lose some market share," he added.

This combined to shape results that were "below our expectations", the CEO revealed.

For fiscal Q1, Tech Data expects high single digit year-over-year sales. ®

comment icon Read 1 comment on this article alert Send corrections


Chris Mellor

Drives nails forged with Red Hat iron into VCE's coffin
Sleep Cycle iOS app screenshot

Trevor Pott

Forget big-spending globo biz: it's about the consumer... and he's desperate for a nap
Steve Bennet, ex-Symantec CEO

Chris Mellor

Enormo security firm needs to get serious about acquisitions


Windows 8.1 Update  Storeapps Taskbar
Chinese Buffet self-service
Chopping down the phone tree to scrump low-hanging fruit
An original member of the System/360 family announced in 1964, the Model 50 was the most powerful unit in the medium price range.
Big Blue's big $5bn bet adjusted, modified, reduced, back for more
Microsoft CEO Satya Nadella
Redmond needs to discover the mathematics of trust