Feb 17, 2015 - Emmen
Fiscal Year 2014 ALSO Group: record dividend for fourth time in succession
ALSO looks back on a successful and challenging fiscal year. Thanks to consistent implementation of the MORE strategy, the excellent customer base and good buyer breadth, as well as the first-class efforts of its employees, the ALSO Group again succeeded in achieving outstanding results. Growth in Germany, Norway, and Sweden, improved results in Finland, and substantial cost reductions at the same time as investments in new sectors, were significant highlights. However, the ALSO Group also had to fight against a strong headwind. In particular, negative price developments in Switzerland and distribution problems in France confronted the Group with challenges.
ICT Market
According to the Context market research institute, total net sales in the ICT distribution market (excluding the Baltics and Netherlands) in the countries that are relevant for ALSO rose by 5.4 percent from the previous year. Development in the market for desktop computing was extremely positive (+ 15.5 percent), resulting from the withdrawal of support for the Windows XP operating system. Growth was also derived from the smartphones and tablets categories. The Business Customers sector (B2B) grew by 4.9 percent and the End-Consumer sector (B2C) by 6.6 percent compared to the previous year. In the B2B sector, all categories that are required for data centers declined because of the increasing use of cloud solutions.
Central Europe and Northern/Eastern Europe Market Segment
In the Central Europe market segment, ALSO increased its net sales by 12.5 percent from 5 076 million euros in the previous year to 5 709 million euros. This mainly resulted from the acquisition of Alpha International B.V. and pleasingly strong growth in Germany. Profit before taxes (EBT) improved by 3.9 percent from 67.3 million euros to 70.0 million euros. Germany, Netherlands, and the acquisition of Alpha contributed to the improvement in EBT. The EBT margin was 1.2 percent, after 1.3 percent in the previous year. Distribution problems in France and heavy pressure on prices in Switzerland resulted in slightly weaker results in those countries.
In the Northern/Eastern Europe market segment, net sales rose by 3.8 percent compared to the previous year, from 1 601 million euros to 1 663 million euros. Profit before taxes (EBT) climbed by 138.0 percent, from 6.5 million euros to 15.4 million euros, and the EBT margin from 0.4 percent to 0.9 percent. The increase resulted mainly from improvements in Sweden and Norway. The successful restructuring of Finland also had a substantial positive effect.
Employees
In 2014, ALSO had an annual average of 3 426 employees from 50 nations, which was 271 more employees than in the previous year (+ 8.6 percent). The increase arose from the acquisitions and the expansion in the Solutions and Services sectors. Personnel expenses in the reporting year amounted to 198.5 million euros, an increase of 10.0 percent from the previous year.
Investments and Acquisitions
The investments and acquisitions of the ALSO Group were in line with the MORE strategy and amounted to 74.3 million euros. Investments in property, plant and equipment, and intangible assets, totaled around 12.0 million euros (previous year 9.0 million euros). The ratio of investments to EBITDA was 9.7 percent (previous year 7.9 percent). Cash used for acquisitions in 2014 amounted to around 62.3 million euros.
With the purchase of ALSO Cloud Oy in March 2014, ALSO acquired a Cloud Control Panel that was already successfully implemented in the market in Finland. In the second half-year, ALSO created the electronic data interchange with the ERP system that is necessary to network resellers and service providers. It is now online in all twelve ALSO countries and resellers can sell cloud solutions and configure them for their customers. In mid-2014, ALSO completed the acquisition of Alpha. The company distributes printer consumables in Europe. The acquisition strengthens ALSO’s expertise in the Supply business in all countries where Alpha and ALSO are represented. At the new location in Augsburg, ALSO provides logistics services for the Weltbild Group. The goal is to provide logistics services from the site for further customers and to use the warehouse for shipping small items like mobility.
Disbursement to the shareholders
The Board of Directors of ALSO Holding AG pursues a policy of continuous dividends and strives for a payout ratio of 25 to 35 percent. The annual dividend is defined in the light of the current income and financial situation as well as the corresponding outlook. For 2015, the Board of Directors proposes a distribution to the shareholders from the reserve from contribution in kind of 1.60 Swiss francs per share. This represents a total dividend payment of 20.5 million Swiss francs. In view of the massive upward revaluation of the Swiss franc, this represents a distribution of 32 percent of Group net profit (at the exchange rate of January 30, 2015). In the previous year, 29 percent of Group net profit was distributed. The proposal will be submitted to the shareholders for approval at the Annual General Meeting of March 12, 2015.
Outlook
The overall outlook for economic development in 2015 remains subdued. For the ICT market (excluding IT and telecommunication services) in the ALSO countries, total growth in end-user spending of 2.8 percent is forecast.
Again in 2015, the focus will be on consistent implementation of the MORE strategy and further development of the various Supply, Solutions, and Services business models. Following the successful merger of Alpha and ALSO Netherlands, the focus will be on expanding our provider and buyer portfolio. In Switzerland, ALSO will consistently confront the challenge of the strong Swiss franc with cost- and margin-optimization measures. Following the successful integration of the ALSO Cloud Control Panel, first sales revenues in the Digital Services sector are expected.
ALSO will continue to strive for a target payout-ratio of 25 to 35 percent.
