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Esprinet Group: the European technology wholesale distributor

Esprinet Group: the European technology wholesale distributor. Index. The Esprinet Group The market In Italy In Spain The business model Esprinet product marketing The sales force The customers In Italy In Spain The service division The logistics Esprinet Italy Esprinet Iberica.

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Esprinet Group: the European technology wholesale distributor

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  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 • In Italy • In Spain • 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 • In Italy • In Spain • The service division • The logistics • Esprinet Italy • Esprinet Iberica

  4. Group Overview Multinational distributor of technology to resellers . € 2.37 billion of sales, net income €24.3 million in 2008. 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 31.12.2006 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 2005. 2006 are pro-forma sales, including UMD, acquired in December 2006Source: 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 • In Italy • In Spain • 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 DIRECT SALES Hardware & Software Vendors 2nd - TIER DISTRIBUTION IT Wholesale Distributors €5.0 b Spain €7.1b Italy €2.1b Spain 53% of total 52% of total € 3.5b Italy 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

  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 17.000.000 small-medium sized companies in Europe of which 26% are in Italy. More than 3.000.000 of these have less than 10 employees. Over 29.000 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 100.000€ to ml of €) Source Sirmi 2005

  19. 2007- 2009 Italian Market Source: SIRMI SPA – January 2009

  20. 2007 2009 Italian Market: hardware and software figures End User Cost in milions of EurosSource: SIRMI SPA – January 2009

  21. The Italian Strategy: Organic Growth Opportunities

  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 • In Italy • In Spain • The service division • The logistics • Esprinet Italy • Esprinet Iberica

  26. Esprinet’s business model

  27. Go-to-market Internet System Integr Large Enterprise External People VAR Public Administration Sales Specialist SW House Internal People Dealer SME 14 Cash & Carry Supermarket End User 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 2008 working days : 253Italy 2007 working days : 253 Spain 2008 working days : 254Spain 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 • In Italy • In Spain • The business model • Esprinet product marketing • The sales force • The customers • In Italy • In Spain • The service division • The logistics • Esprinet Italy • Esprinet Iberica

  32. Esprinet product marketing

  33. Product Marketing • 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 Request: Fast MarketResponse: Time to Market = 0Tool: 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

  34. Product Marketing

  35. Business Units

  36. Business Units

  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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