Jul 28, 2015 - Emmen
ALSO Group makes operational progress: profit before taxes (+18.7%)
ICT market
According to the CONTEXT market research institute, in the first half of 2015 the value of the ICT distribution market in the regions that are relevant for ALSO grew by 3.2 percent from the previous year. However, there were wide differences in the performance of the various product categories. While development in the market for data center networking and security (+25.1 percent) as well as unified communications (+24.2 percent) was extremely positive, mobile computing declined (-4.0 percent). This was mainly because the market no longer benefited so strongly from the wave of renewal caused by the withdrawal of support for Windows XP.
In the first half of 2015, the ALSO Group could increase its net sales by 11.9 percent and match the development of the ICT market in virtually all product categories. There was a pleasing sales increase of 17.7 percent in the server computing sector, to which especially ALSO Germany and France contributed.
Central Europe market segment
In the Central Europe market segment, net sales increased by 14.3 percent from the previous year, to 2 907.7 million euros. Profit before taxes (EBT) rose from 25.7 million euros to 30.5 million euros (+18.5 percent). The EBT margin stayed at the previous year's level of 1.0 percent. Central Europe again delivered double-digit sales growth, thanks mainly to particularly strong development in Germany, France, and the Netherlands. Concurrently, ALSO Switzerland further adapted and optimized the measures that were decided to counteract the continuing cost pressure from falling margins.
Northern/Eastern Europe market segment
In the Northern/Eastern Europe market segment, net sales rose by 3.3 percent from the previous year, to 833.4 million euros. Denmark, Sweden, and the Baltics were the main contributors to the growth. Profit before taxes (EBT) improved from 5.5 million euros to 8.5 million euros, and the EBT margin from 0.7 percent to 1.0 percent. This increase resulted mainly from growth in high-margin business sectors in Norway and Sweden.
Acquisition in Poland
The ALSO Group is expanding its presence in Europe by opening the new country company ALSO Polska sp.z o.o., Warsaw. Through the planned acquisition of the activities of PC Factory S.A., competitiveness will be increased and market penetration made more efficient and effective.
Development of ALSO Logistics Services GmbH, Germany
In the first half-year, the logistics activities that were acquired last year from the insolvency assets of Weltbild (now ALSO Logistics Services GmbH, Augsburg) caused losses of around 4 million euros. The personnel reduction measures could not yet be realized as planned. Concurrently, sales have declined. Consequently, in view of its cost structure, without extensive restructuring the company is unable to act competitively in the market. The ALSO Group therefore decided on July 27, 2015, to discontinue financing the ongoing business. Should no further means of financing be available, the management of ALSO Logistics Services GmbH must now decide whether to apply for insolvency. The resulting non-recurring restructuring costs for the ALSO Group in the second half-year are estimated at around 8 million euros.
Outlook for 2015
For 2015, for the entire IT market in the ALSO countries (excluding the Baltics), the Gartner market research institute forecasts slower growth in end-user spending of 1.1 percent. Growth in the previous year was still 2.2 percent. Gartner expects sales of PCs, tablets, and ultramobile end-devices to stagnate. Mobile telephones also show first signs of market saturation.
Despite the challenging conditions and the expected costs associated with the restructuring of ALSO Logistics Services GmbH, for the fiscal year ALSO expects a result at the level of the previous year. "Overall, we are very optimistic for the current fiscal year. We continue to expect a stable business development and a solid result at the previous year's level", says Gustavo Möller-Hergt.
