Ingram to 'simplify and de-layer' in $100m restructure

Distribution looks to make annualised nine-figure savings despite solid 2013 growth

Ingram Micro is undertaking a restructuring process aimed at saving $100m (£59.4m) a year, despite 2013 results that show double-digit sales growth and an increase in gross margins.

The structural revamp is based on three key drivers, the first of which concerns "aligning and leveraging the company's infrastructure globally". The second is focused on "de-layering and simplifying the organisation", while the third focuses on "maintaining investments in expertise and capabilities" as it strives to grow faster in its higher-margin businesses.

The distribution heavyweight hopes to facilitate annual savings of between $80m and $100m, although the associated initial one-off costs are estimated to be in the same region. A total of $8m of these costs was swallowed in the fourth quarter of last year, with most of the remainder expected to come sometime in 2014's opening half. Ingram expects to begin realising the cost-saving benefits in the second half of this year, with the full benefit to be felt in 2015.

Chief executive Alain Monie said: "Our company is proactively accompanying great changes in the technology industry and evolving its business composition and structure accordingly.

"As we explore and execute on our various initiatives for growth and stronger profitability, the overall objective of our organisational effectiveness programmes - which we have been working at developing over the past few months - is to streamline and focus our resources to run our businesses faster, smarter and better to capture the tremendous opportunities we have already started to invest in, while generating greater, sustainable shareholder value."

For the quarter ending on 28 December, the distributor saw sales grow four per cent to $11.8bn. Gross margins were up 19 basis points to six per cent, although operating profit growth lagged this somewhat, rising 2.8 per cent to $172.6m.

Full-year revenue rose 12 per cent to $42.6bn, while operating income grew 11.4 per cent to $514.9m. In 2014 Ingram anticipates growing sales in the low to mid single digits.