Bite of Apple sweetens Ingram Micro's European results
Apple generated more than $1bn sales for Ingram in its Q1 following local iPhone partnership
Ingram Micro's European sales are surging thanks partly to its new contract to distribute the iPhone across parts of the region.
The world's largest distributor saw sales on this side of the pond rise 12 per cent to $3bn (£1.8bn) year on year in the three months to 29 March, with the UK, France, Spain and Italy all delivering "strong" double-digit growth in local currencies.
Ingram admitted local results were bolstered by a recently signed partnership with Apple enabling it to distribute the iPhone 4s, 5s, 5c and related accessories in Germany, France, Sweden and Spain.
In fact, Apple accounted for a whopping 11 per cent - or more than $1bn - of Ingram's total sales in its Q2, second only to HP in its importance to the distributor.
Overall growth was dragged back by weaker sales at mobility arm Brightpoint after one of its OEM partners virtually stopped production. Ingram's total worldwide sales inched up one per cent to $10.38bn, with net profit halving to $24.8m as it swallowed a $47m charge relating partly to its ongoing reorganisation in Europe and elsewhere.
Chief executive Alain Monie said it had been a good start to the year, adding that the distributor remains confident it will achieve low- to mid- single-digit growth for the full year.
"The PC refresh cycle picked up but we selected not to participate in some of the business as it was not up to our profitability standards," Monie added in a Q1 conference call, a transcript of which can be found here.
"The demand environment is slowly improving and we had ample growth opportunities, particularly in higher-margin areas where we are investing to improve our mix."
Monie claimed Ingram is gaining momentum in cloud, with the distributor now offering more than 200 cloud-based solutions from over 70 vendors through its Cloud marketplace.
The global restructuring drive - which includes moving more European back-office functions to Bulgaria - will ultimately result in annual cost savings of $80m to $100m and a similar level of one-time costs, Ingram said.
Ingram president Paul Read claimed the reorganisation had not been a distraction for its European business.
"Of course there are issues that come up which we are dealing with but I think it's been very well planned and executed so far and we continue to be diligent through the rest of the activities through the rest of the year," he told analysts. "But no, we are really not seeing a distraction or loss of business."
European growth came in at seven per cent in local currencies, driven by the SMB market but also retail, which Ingram said was helped by the Apple business "which is proceeding very well".