Avnet(US:AVT)2021-08-12 00:43Financial Data and Key Metrics Changes - In Q4 2021, the company achieved sales of $5.2 billion, representing a 25.7% year-over-year increase and exceeding prior guidance [12][16][17] - Adjusted EPS for the fourth quarter was $1.12, up from $0.64 in the prior year's quarter [16][17] - For the fiscal year, total sales reached $19.5 billion, a 10.8% increase from the previous year [17] Business Line Data and Key Metrics Changes - The Electronic Components segment generated revenues of $4.8 billion, a 23.7% increase year-over-year [19] - Farnell achieved record sales of $441 million, with an operating margin of 8.3%, progressing towards a target of 10% [14][21] Market Data and Key Metrics Changes - Strong performance was noted in EMEA and Asia, with continued improvements in the Americas [13][19] - Demand Creation accounted for approximately 30% of Electronic Components revenue, highlighting its importance for long-term growth [13] Company Strategy and Development Direction - The company is focused on enhancing its digital capabilities and expanding its product offerings, including IoT solutions [14][24] - There is an emphasis on managing supply chain risks and improving customer relationships to navigate the current market dynamics [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strong demand and the ability to manage supply constraints effectively [22][24] - The company anticipates sustainable operating margins in the range of 3% to 3.5% by the latter half of fiscal year 2022 [22][23] Other Important Information - The company increased its dividend by 4.8% in the quarter, returning $22 million to shareholders [22] - Inventory increased by $475 million to meet customer demand, with working capital days improved to 70 [21][22] Q&A Session Summary Question: Inventory build and its implications - Management is comfortable with the inventory build, noting that it was strategically planned and is of good quality [28][50] Question: Sustainability of order growth - Order growth is expected to be sustainable, driven by both pricing increases and a favorable mix of products [29][30] Question: Plans for SKU expansion in Farnell - The company plans to add approximately 160,000 SKUs in Farnell by leveraging existing supplier relationships and expanding current lines [34][36] Question: Fiscal 2022 outlook - Management is optimistic about fiscal 2022, expecting to outperform consensus estimates due to strong demand and improved operational efficiencies [42][44] Question: Balance between supply and demand - The book-to-bill ratio remains strong, indicating healthy demand, while lead times are still extended but showing signs of modest improvement [58][59]