Group's consolidated results overview 1.Letter from the Chairman
Dear Shareholders,
2023 was a particularly complex year for the distribution sector and in particular for PCs and telephones, which more than other product segments suffered the negative impact that the sharp increase in inflation and interest rates had on the sentiment of consumers and, partially, businesses.
Net of non-recurring items mainly linked to the settlement of old tax disputes, the Group would have recorded a consolidated net income of 24.2 million euro, down compared to the record result, similarly measured, of 45.4 million euro in 2022, against sales of approximately 4.0 billion euro, down compared to approximately 4.7 billion euro in 2022, mainly due to the material fall in sales in the consumer customer segment and on the product lines sold within it: PCs, telephones, televisions and household appliances.
An year of transition
The year 2023 was a year of transition for our Group.
After five years of growth in sales and profitability, with 2021 and 2022 marking two successive historical records in the Group's profits, due to a very challenging consumer market, 2023 brought operating profitability back to levels more or less similar to those of 2020.
The impact of the settlement in 2023 of old tax disputes further burdened the income statement.
Despite this, the year was profitable in many other respects.
The integration of the Spain subgroup companies was completed by reorganising the structures into two legal entities, Esprinet Iberica and V-Valley Advanced Solutions España, which now have clarity in the two distinct missions of managing the PC, peripherals and Consumer Electronics market for one, and the Advanced Technological Solutions and Services market for the other.
The local management team was reorganised and inventory levels were drastically reduced, bringing the Net Working Capital back to normal levels.
In Italy, the businesses relating to Solutions and Services on the one hand and to energy efficiency solutions on the other have been separated and organised into two companies, one of which was already operational at the beginning of February, with the other expected to start in the course of the second quarter.
Two acquisitions were made and, above all, the product mix improvement process continued with an increase in margins in spite of incremental costs linked to inflation and increased interest rates.
The strategy of expanding geographical and product diversification continues and the message for our investors is once again clear: we operate with the aim of creating sustainable value over time.
Diversification in order to mitigate market risks, attention to ESG issues, operational excellence and above all a focus on Return on Invested Capital rather than pure profit are the basis on which we have managed and will continue to manage the challenges and opportunities offered by the market.
Technology distribution
The distribution segment, measured in January 2024 by the British research company Context through a panel of distributors largely representative of the general trend, recorded sales of approximately 86.7 billion euro in 2023, a decrease of-4.9% compared to 91.2 billion euro in 2022, with contractions recorded in all quarters after the first.
The contraction was widespread in the various markets: Germany, first European market, -6.2%, United Kingdom and Ireland, second market by size, -7.5%, France -2.3%, Poland -5.2% %, Italy, with an unchanged weight of 10.6% in the European market, -3.9%, Spain -1.6% and Portugal -4.9%.
