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European Distributors See Pockets of Hope

Europe may be causing many executives to shrug their shoulders with continued uncertainty, but some distributors are making the most of the unpredictable economic spiral and ratcheting up decent financial quarters.

{complink 12816|Mouser Electronics Inc.}, for instance, recently reported strong and continuing growth with its nine European offices in Germany, the UK, Czech Republic, France, Israel, Italy, the Netherlands, Spain, and Sweden, despite the general weakness plaguing Europe.

“By adding more resources and staff members in Europe, we have helped drive further growth over an amazing 2010-2011,” said Mark Burr-Lonnon, Mouser vice president for the EMEA Business. “We’ve seen around 20 percent further growth in 2012 and gaining momentum each month, solidifying us as a key player in the European market. No question about it, 2012 is proving to be another great year for Mouser, especially bearing in mind the slowing of the market.”

To date, Mouser's sales gains on a country-by-country basis include: a 24 percent increase in France; a 27 percent hike in Spain; Benelux (a customs union for Belgium, the Netherlands, and Luxembourg) was up 58 percent; the UK climbed 19 percent; a 23 percent increase in Italy; and Germany jumped 16 percent. According to a statement EBN received in July, the company said these 2012 figures compound 2010-2011's growth of 43 percent, and combined three-year sales for Mouser soared 450 percent.

“The web continues to be a key driver of our new business, accounting for 75 percent of all new accounts and close to 50 percent of sales, which has made a major contribution and three-year increase in the European customers of over 260 percent,” said Burr-Lonnon.

{complink 12895|Premier Farnell plc} saw European sales also inch up in the recent first quarter for fiscal 2013. Although overall sales dropped five percent year-over-year, Europe had sequential growth of 2.1 percent, the company reported in June.

“Global quarterly sales per day have been maintained at a stable level since the decline in the global electronics and technology markets that impacted us in June last year,” said Laurence Bain, Premier Farnell's group chief executive.

“In the first quarter, we saw sequential growth in both Europe and Asia Pacific and a reduction in the Americas as that business continues its progression from commodity to strategic MRO and EDE. Although at this stage of the cycle EDE markets remain challenging, MRO sales per day continued to progress on a year on year basis.”

Others, though, like their brothers across either side of the electronics aisle — those producing components and those selling finished devices — have seen the opposite trend.

For example, Distributors’ and Manufacturers’ Association of Semiconductor Specialists (DMASS) — a European non-profit organization that collates detailed semiconductor distribution market data on a quarterly basis by country and product groups such as microcontrollers, flash memories, and analog components — said last week the regional semiconductor market remains weak.

DMASS, which consists of 35 active members and represents between 80 and 85 percent of the total European distribution market, said that although sales are coming in at a high level, second-quarter sales dropped when compared to a record 2011 quarter.

Georg Steinberger, chairman of DMASS, said in a statement: “The first half of 2012 remains weak, relatively speaking, as records of the past do not count in a competitive environment. We are still facing a very quiet market today, with uncertainties around the overall economical situation in Europe. Although the second half will be inevitably better in relative terms, 2012 won’t be a growth year either, that much is clear. 2012 will end with a small minus, provided no macro-economical problems occur.”

DMASS said: “From a regional view, the disappointment is with Western Europe and the growth fantasies are with Eastern Europe. Romania, Israel and Russia grew double-digit, the rest of Eastern Europe remained slightly positive.”

It said that in Western Europe, France (-9.8 percent), UK (-10.3 percent), Benelux (-11.4 percent), and Iberia (-13.8 percent) reported a decline that was under-proportional, while Nordic (-18 percent), Germany (-21.9 percent), and Italy (-24.3 percent) dropped considerably more than average. The top five countries in sales were Germany (472 million euro; $591 million), Italy (139 million euro; $174 million), UK (124 million euro; $155 million), France (110 million euro; $137 million), and Russia (65 million euro; $81.4 million).

So, as with everything else, the story about Europe's growth potential or tumbling decline very much depends on who's telling the story.

12 comments on “European Distributors See Pockets of Hope

  1. Houngbo_Hospice
    August 23, 2012

    @Jennifer,

    “the story about Europe's growth potential or tumbling decline very much depends on who's telling the story.”  

    The truth is somewhere in the middle. But it is good to know that everything is not that bad for European distributors. Mouser Electronics Inc. growth figures are very impressive.

  2. elctrnx_lyf
    August 23, 2012

    I believe any positive sign of Europe market will lift the spirits of many companies. Even queen Elizabeth is doing her bit by announcing 1m pound awards for the visionary engineers.

  3. Barbara Jorgensen
    August 23, 2012

    Catalog distributors, which focus on engineering and low-volume, high mix orders, can buck overall trends. As long as compnaies continue to design, catalogs will show some growth even when volume sales are down. These companies are also high-service, which doesn't hurt either

  4. stochastic excursion
    August 23, 2012

    Investment in R&D and retooling are one course to take when there are problems with investment, finance, and credit.  In this case catalog sales make sense. Government spending is down but maybe a market in niche luxury goods.

  5. SunitaT
    August 24, 2012

    The web continues to be a key driver of our new business, accounting for 75 percent of all new accounts and close to 50 percent of sales

    Good to hear that Europe is showing signs of recovery. Web is key business driver and companies should take all steps to take use of all the features of the web including social media.

  6. SunitaT
    August 24, 2012

    the UK climbed 19 percent; a 23 percent increase in Italy; and Germany jumped 16 percent.

    @Jennifer, what was the impact of the Olympics on the UK economy ?  Which companies got the maximum benefit of this event ? Did it help increase the government expenditure and thus improve the market sentiments ?

  7. Wale Bakare
    August 24, 2012

    Hmmm! That's interesting – motivating potential innovative engineers, a welcome idea. What of sustainability? ” Motivation's what gets you started, while habit keeps you going”. Though, I think concerted efforts still a panacea to recovery to get things back on the right track.

  8. Jennifer Baljko
    August 24, 2012

    Hospice – The story is not only in the middle, it more like rubber band. Some companies have been pulled  in some directions and are snapping back, other still have more pull left in them or got hit a few quarters ago and have started to turn around.

  9. Jennifer Baljko
    August 24, 2012

    electrnx_lyf… really? hadn't heard about the queen's visionary engineering awards. I'll look it up.

  10. Jennifer Baljko
    August 24, 2012

    Barbara – good point… forgot to mention a bit more about their operating model, which puts some of this into context.

  11. Jennifer Baljko
    August 24, 2012

    triaipur – Certainly the Olympics must have had an economic impact overall, but I'm not sure how the games would have impacted EU distributors. There were lots infrastructure and  general improvments to be done, but how much of that business was routed to catalog distributor, I don't know. 

  12. Jennifer Baljko
    August 24, 2012

    Wale – Good point on the getting start motivation vs the momentum you need to keep going. Without having read anything yet on that incentive program, perhaps the idea is that engineers are types of people who would problem-solve and keep trouble-shooting even if they weren't given an award.. giving a monetary award maybe would inspire engineers at least bring their ideas somewhat forward, instead of keeping it locked in their heads.

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