avnet analyst day 2010 presentation 5 electronics marketing

Accelerating Your Success™1 Accelerating Your Success™

Avnet Analyst Day 2010

Performance & Potential

Avnet, Inc.

December 15, 2010

Accelerating Your Success™2 Accelerating Your Success™

Electronics Marketing

Harley Feldberg

President, Electronics Marketing

Accelerating Your Success™Accelerating Your Success™

Agenda

• Our Mission

• Market Opportunity

• Who We Are

• Growth Opportunities

3


Our Mission

Avnet Electronics Marketing will be the most successful electronic components distributor in

the world by providing our customers & suppliers best-in-class design chain and supply chain

solutions.

4

Market Opportunity


2011 Sizable Revenue and GP Opportunity

$204 B

~ DTAM

$14 B

$9 B

$49 B

~ Channel GP$

$900 M

$6 B

$4 B

$73 B

$14 B

$72 B $ 10.9 B

Source: Avnet EM

TAM Sources: Electronics Outlook, Bishop, Fleck, Gartner, iSupply, Paumanok, SIA (Rev 11/5/10)

DTAM/GP: Avnet EM estimates for independent franchise distribution

TAM

Medium

Large

Small

$291 B

Our global footprint positions us for strong share gain

6


Design To Consumption – All Regions Matter

Semiconductor Design TAM by Region2009

Semiconductor Consumption by Region2009

Source: Avnet EM BIO, Gartner, iSuppli

The winning formula for components distribution requires strength in both

7


Projected Components Growth through 2013

Semiconductors w/o MPUs, DRAMs or Flash Interconnect, Passive and Electromechanical

8


Growth Forecasted in All Regions

Sources: Bishop, Electronics Outlook, Fleck, Gartner, iSuppli, Paumanok, SIA (Rev: 11/2010)

Equates to approximately $27B of DTAM

Growth

2010 – 2013 Component TAM Growth Forecast

9

Who We Are


Experienced EM Global Leadership Team

Stephen WongAsia

Harley FeldbergPresident, EM Global

Ravi KichlooSemiconductor Business Dev.

Tim BarberDesign ChainBusiness Dev.

Bill CrowellFinance

Sean FanningMarketing &

Communications

Ed SmithAmericas

Beth ElyAvnet Express

Dayna BadhornStrategic Planning

Gerry FaySupply Chain

Global & Strategic Accounts

Patrick ZammitEMEA

Tom McCartneyJapan / IP&E

Average 20+ years of industry experience

11


Unique Market Position

Americas 40%

EMEA 38%

Asia 22%

EM FY05

Americas 31%

EMEA 35%

Asia 36%

EM FY10

Americas 67%

EMEA 28%

Asia 5%

EM FY01

With all regions achieving financial metrics

A balanced approach…

$8.3B $6.3B $14.4B

12


Specialized Customer Support

Optimizing our value prop for our customers and suppliers

Avnet Express

Tier 1

AVNET SERVICE AMERICAS EMEA ASIA Japan

Avnet UnitedAvnet Velocity

Core Distribution

Supply Chain Solutions& Logistics

Design Chain & Supply ChainSolutions

Avnet EMAvnet MemecAvnet Embedded

EBVSilicaAvnet AbacusAvnet MemecAvnet Embedded

Avnet EMAvnet Memec

Avnet EMAvnet Unidux

Tier 2

Tier 3

Tier 4

13


Focused on Profitable Growth

Our strong fundamentals maximize profitable growth…

- Leadership- Scale & Scope- Growth Strategies

14

Growth Strategies


The Winning Formula

Global Strategies

Design Chain SolutionsSupply Chain Solutions

AsiaJapan

E-CommerceIP&E

Embedded

Execute these strategies using:Our strengths as an industry leaderOur global scale and scopeOur ability to invest

16


Avnet Electronics Marketing: Global Strategies

Design Chain, Migration to Solutions

Global Strategic Imperative

• We will offer the most compelling Demand Creation value proposition for both customers and suppliers

–EM Design Chain Opportunity:

–Design Chain: approximately 35% of our business

–Over 800 Engineers Worldwide

–Greater than 45K Design Wins Annually

Tim Barber

Why It Matters…

• Design TAM is dispersed Worldwide

• Suppliers are narrowing their focus both with customers and technology offering

• Customers want solutions, not just parts

• Affords us higher margins

• Customer entanglement

17



Supply Chain Solutions, Complex and GlobalGerry Fay


• We will continue to develop leading-edge supply chain strategies to meet more complex customer demands

– Avnet United: Global Business Mgmt

– Business Migration: Linking inter-regional design and fulfillment

– Avnet Velocity: Tier I Fulfillment-only Services

– Complex Supply Chain Solutions influences approximately 15% of our business

Why It Matters…

• Innovative Solutions Developed to Leverage the Core Business

• Extends ROI of Demand Creation Investments in the West

• Leverages our Scale and Scope

• Customer Entanglement

18



Growing in Asia, Profitably


• Drive a leading distribution model in Asia that effectively balances a focus on EP generation with an aggressive investment in regional growth

–Develop effective connections with other regions to create a globally differentiated value for EM

–Invest in, and develop, infrastructure that gives us scale and productivity

Stephen Wong

Why It Matters…

• Continue organic investments in growth segments

• Broad Coverage

• Achieving financial metrics

• Strong leadership with acquisition and integration experience

• Significant M&A opportunities

• Peer Group ~ $26B DTAM

19



Japan, Significant Market Opportunity


• We will continue to develop our business in Japan financially and operationally

–Pursue additional acquisitions or alliances to create scope and scale

Tom McCartney

Why It Matters…

• Japan Design influences 20% of global spend

• Large fragmented market, Independent DTAM is approximately $12B

• Significant M&A opportunities

• Customer Supply Chain Complexity Increasing

• Enables further supplier collaboration on global engagements

Top 32 Distributors

20



e-Commerce, Broadening Reach and Services


• Expand our e-commerce offering to enable “speed and convenience” procurement of high-profit, low-volume orders

–Common global e-commerce engine (IT)

–Online engineering for NPI

–Regional customer interface models

– Local Language

– Local Currency

– Local Inventory

Beth Ely

Why It Matters…

• Margin Enhancement

• Customer Expansion

• On-line Engineering Support

• Expanded Service Offering for Speed and Convenience

$14 Billionsmall customer DTAM

opportunity

21



IP&E Expansion, Selling Across the Board


• We will expand our “share of wallet” by further leveraging and extending our industry leading IP&E Portfolio

– Specialized Resources in all regions

– Critical element of Solution Selling Strategy

Tom McCartney

Why It Matters…

• Margin Enhancement

• Fragmented Distribution Channel provides Acquisition Opportunity

• Supplier Channel Consolidation

• Estimated $12B DTAM

22


EM Global Strategy:

Embedded, The Design Evolution


• Define and launch Avnet EM’s Embedded strategy regionally and globally

– Implement a globally aligned strategy, incubated regionally, to extend EM’s value proposition in Embedded products

– Ensure the successful integration of Bell business

Why It Matters…

• Solution Selling Strategy

• New Integration Service Models

• Displays

• Embedded Boards

• HDD

Sources: Gartner, IDC, iSuppli, (*Without TVs and Monitors), Avnet BIO Estimates

Estimated $50BTAM

23


Development Kits

Supplier Created

Avnet Created

3rd Party Partners

Operating Systems

Microsoft

Linux

Production Modules

Processing

Communications

Power

Wireless

Avnet’s Customer Touch Points…Expanding

• MPU /MCU

• DSP

• Programmable Logic

• ASIC

• Connectivity

– Wired

– Wireless

• Analog

• Power

• IP&E

• Displays

• Memory

• Embedded Boards

– Extension of processor architecture

• Displays

– Panels

– Systems

• Integrated Systems

– Supplier systems

– Value added services

Chip Level System Level Embedded Solution Level

Customer Benefits…

Time to Market

Development Costs

24


Summary

• CY10, an exciting year, yielding outstanding results

– All regions participated in the performance

• Technology continues to proliferate the globe

• Experienced and committed leadership team

• Global scale and scope matter more than ever

• Ability to invest organically and through acquisition

• Our strategic imperatives will accelerate profitable growth

• Looking forward, growth should continue at a steady pace

• Strong operating discipline regardless of market conditions

25

avnet analyst day 2010 presentation 5 electronics marketing

Technology

avnet expressoptimizing

avnet em estimates

avnet em bio

b dtam

avnet emtam sources

b medium

avnet analyst day

class design chain