Exclusive Networks looks east in 2014 quest to break €500m

VAD to carry on down the acquisition trail in eastern Europe and South Africa after revenue hits €328m in 2013

VAD Exclusive Networks is eyeing expansion into eastern Europe and South Africa as it plans on breaking the €500m sales barrier this year.

This week the distributor published 2013 financial results which showed group revenue up 18 per cent annually to €328.3m (£270m). Chief executive Olivier Breittmayer explained that growth was somewhat affected by Exclusive parting ways with Ironport, a vendor with which the distributor conducted more than €20m of business in the prior year.

"But that shows we can [lose] a big vendor and still show growth," he added.

The long-term growth target remains passing the €1bn mark in 2017, and the forecast for the current year is for the top line to nudge past €500m. The plan is for acquisitions to provide €76m in additional turnover with the rest - some €95m - coming from organic growth.

The firm is looking to close another three or four buyouts this year, revealed Breittmayer, but the plan for the UK and other mature markets is likely to focus largely, if not solely, on organic expansion.

"The plan is to continue to expand across EMEA; we are starting to look at eastern Europe, and we are also not in South Africa," he added. "We have big ambitions in the UK, and we think we are able to do 30 per cent growth there [this year] without acquisitions, so they are not in the plan. But I never say never. Some of our businesses in [our existing] markets because they are not at the critical mass yet - our business in France has huge potential to grow."

Desmond added: "It is not just about sales growth, it is about market-share growth."

That was the year that was
Last year the UK emerged as the firm's largest territory, chipping in 31.1 per cent of the total top line, ahead of France on 23.4 per cent, the DACH region on 22.2 per cent, southern Europe on 8.4 per cent, the Nordics on 7.5 per cent and Benelux on 7.4 per cent.

According to Breittmayer, the year's success stories included the firm's new Switzerland office, which contributed €4.5m in greenfield revenue during its first year of operation. The acquisition in late 2013 of Dubai-based Secureway adds almost €50m in additional sales across 10 Middle Eastern countries.

The distie's Benelux operation was bolstered by the buyout of local player Terach, while Exclusive also recently landed in Turkey via the acquisition of Bilișimcim. This week the company also expanded into Denmark with the opening of a Copenhagen office, having concluded that there were no suitable acquisition targets in the country.

Other new launches during the year included BigTec, the vendor's big data-focused business that was spun out into a separate entity in October. The new company has annual revenues of about €35m.

"This is not just about a new vendor that we have signed, it is a whole brand that we will invest in and grow," added Breittmayer.

Other initiatives included the launch of the Passport services brand, and the CARM range of security products and services.

Group marketing director Barrie Desmond said: "[Partners] now have a solution-based sale, rather than a point product sale. When you put [the CARM offerings] together, you get a better outcome, a better taste.

"They do not have to sell the whole portfolio of CARM products, they might just put two or three together. And all material and collateral is white-label. This is unashamedly enterprise - [addressing] national government and large enterprise; this is not an SME play."

But Breittmayer (pictured right) and Desmond vowed that the firm would remain committed to launching emerging technologies from new vendors.

"Sometimes the format of the competition changes when [our partners] become bigger and it then becomes interesting to the mammoths and elephants of the distribution world," said Desmond.

"But even when [our partners] appoint a second distributor, we are able to retain the vast majority of the business and not get drawn into these dogfights on margins; we are selling technology and disruptive thinking, not a better ordering system, or point-of-sale system, or logistics - although we have that in our kit bag as well."