Eastern promise for Ingram
Positive results put broadline distributor in strong position to spread its wings in Europe
Broadline distributor Ingram Micro is hoping to propel its business forward by acquiring firms in eastern Europe and driving further into the lucrative retail sector.
The firm has the financial clout to acquire, after posting worldwide turnover of $6bn for the quarter ended 2 October, a 16 per cent increase on the $5.21bn posted in Q3 2003. Profit for the quarter, however, stood at $77.3m, down on the $81.2m a year ago.
Hans Koppen, president of Ingram Micro Europe, told CRN that the European region had seen a "solid performance" in Q3. "This reflects an improvement of the European economic refreshment cycle since 2000," he said.
Koppen added that the retail and mobility markets will continue to be areas of focus over the coming year. "Retail has always been a challenging sector, but consumers are becoming more IT sophisticated, prices are coming down and there are more opportunities for the channel," he said.
Koppen added that the distributor's three main business strands - systems, peripherals and software - had all performed well during the quarter.
Ingram is still looking to make acquisitions, particularly in new EU member states such as Poland and the Czech Republic. The firm recently announced that it also intends to acquire Tech Pacific, giving it a strong presence in the Asia Pacific region.
"Our priority in Europe is the newly entered EU countries and we have a number of potential acquisition targets," Koppen said.
Steve Brazier, chief executive of researcher Canalys, said Ingram is much better run than it was two or three years ago.
"It has a tight management team which is better equipped to understand regional variations than it used to be and is fairly confident in terms of expansion," Brazier said.
"The acquisition of Tech Pacific will give it the edge over Tech Data, which has no presence in Asia Pacific. However, Ingram still has a weakness in eastern Europe and the Middle East. It is under pressure from vendors to establish a presence in these regions and close these gaps."
However, Brazier added that the distributor could encounter difficulties with acquisitions in eastern Europe because of the Sarbanes-Oxley rule.
"Eastern European countries have not always been known for their transparency, so it could cause a few problems when Ingram is faced with the excessive requirements of the Act," he said.