Insight content with flat 2012 numbers
No movement in 2012 sales or operating profits as VAR predicts accelerated sales growth at expense of gross margin this year
A 12-point swing towards hardware put a dent in Insight's EMEA profit levels in Q4, but the reseller reached the end of 2012 with sales and operating income more or less flat.
For the three months to the end of December, global reported revenue was down one per cent to $1.3bn (£840m), while operating income fell 13 per cent to $36.6m. The EMEA segment saw sales grow two per cent in dollar terms to $378.4m, but operating profit was more than cut in half, from $8.5m in FY11 to $4m last quarter.
The revenue split across the region for the whole of 2012 stood at 37 per cent hardware, 61 per cent software and two per cent services. The latter figure remains unmoved on the prior year, but in 2011 the hardware-software split was 31-67. This can, in part, be chalked up to the acquisition of £100m-turnover German hardware specialist Inmac a year ago.
For the full year 2012, Insight saw worldwide sales stay flat at $5.3bn, while operating profit rose one per cent to $148.2m, equating to margins of 2.8 per cent.
Chief executive Ken Lamneck said: "Overall, 2012 was a productive year for our business. Market conditions were softer as macroeconomic concerns globally led to lower capital spending for IT products, but we executed well in the environment; improving the overall profitability of our sales, investing strategically in sales and services resources, successfully integrating two acquisitions, and essentially completing our IT systems integration projects in Europe and North America. We believe these actions will position us well as we head through 2013."
This year Insight is predicting that the global IT market will display "low single-digit" percentage sales growth, with the company expanding "slightly faster than the market as it continues to invest in its sales force and expands its capabilities in key markets".
However, Insight anticipates that its 2013 gross profit will be affected to the tune of $8m to $12m by "partner programme changes in the company's software category".