Avnet (AVT) 47th Annual Raymond James Institutional Investor Conference summary

Company overview and business segments

• Operates as a global value-added distributor, connecting technology manufacturers with customers in over 140 countries.

• Two main segments: Electronic Components (EC) for high-volume production customers and Farnell for high-service, small-quantity, R&D-focused customers.

• EC business is geographically diverse: Asia (50%), Americas (20%), Europe (30%).

• Farnell offers higher gross margins (about 30%) compared to EC (10-12%) and focuses on speed, convenience, and a broad SKU offering.

Market trends and geographic performance

• Asia has led the recovery with six consecutive quarters of growth, now at record revenue levels, especially in Taiwan and China.

• Europe has just returned to growth after significant declines, with industrial and transportation as key sectors.

• Americas show moderate growth, with robust book-to-bill ratios and backlog replenishment across all regions.

• Customers are shifting to real consumption, with inventories now healthy but lean, indicating true demand.

Pricing, margins, and supply chain dynamics

• Price increases during shortages were largely passed through to customers, boosting gross profit dollars but not margin percentage.

• Current price increases are limited to specific technologies, driven by rising input costs like precious metals and tantalum.

• Supply chain disruptions and tariff changes have created opportunities to provide value-added services and adapt distribution strategies.

• Less than 2% of revenues in the Americas and less than 1% globally are from tariff billings.