A botched rollout of its new SAP system in Australia left its mark on Ingram Micro's first-quarter results as the distributor's profits fell by a fifth.
The New York-listed broadliner posted an eight per cent rise in sales to $8.72bn (£5.29bn) for the three months to 2 April following a "stand-out" quarter in North America. Demand in Europe was patchy.
However, net profit sank by 20 per cent on an annual comparison, as complications relating to the deployment of its new SAP system in Australia hit its bottom line hard. Its share price fell by more than 10 per cent in the aftermath of the announcement.
Ingram Micro began the phased migration to the new system more than three years ago and it has so far been successfully deployed in Singapore, New Zealand, Indonesia, Chile and Belgium.
But the conversion in Australia, which began in February, has proved more complex than in other countries, the distributor admitted. The complications meant profits generated in the country fell by $21m on an annual comparison.
In a Q1 conference call, a transcript of which can be found here, chief executive Gregory Spierkel said it would take the balance of the second quarter to completely address the system issues.
"We are evaluating the lessons learned from Australia and are developing improvements to help mitigate similar impacts in future deployments," he said.
"Without the complications of Australia, results for the quarter came in generally as we expected."
Ingram Micro's EMEA sales exceeded third-party forecasts of the overall market, growing eight per cent to $2.88bn, but Spierkel said demand from the region had been "somewhat spotty".
Germany and Hungary proved bright spots, although Spierkel said weak consumer demand in the UK, Spain and Italy negatively affected its retail business.
Meanwhile, the firm's EMEA data capture and point-of-sale business is one of its fastest growing in terms of sales and profitability, said Spierkel.
"We recently transferred one of our top-performing managers from Germany to oversee this business and he has signed new vendors and customers," he added.
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