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ELKO Group closes 2019 with high turnover and profitability indicators

Expanding the product portfolio and exploring new markets resulted in the best financial results to date.
  • Turnover: USD 1 883 million (EUR 1 682 million), 6.5% more than in the previous year;
  • Gross profit margin: 5.3%, 0.6 percentage points higher than in the previous year;
  • Gross profit: USD 99.7 million (EUR 89 million), 21% more than in the previous year;
  • Net profit: USD 19.8 million (EUR 17.7 million), 111.5% more than in the previous year.
  • Components – USD 487 million (EUR 435 million), a 4% increase;
  • Personal computers – USD 291 million (EUR 260 million), a 19% increase;
  • Mobile phones – USD 533 million (EUR 476 million), a 14% decrease;
  • Household and office equipment, peripherals – USD 153 million (EUR 136 million), a 28% increase;
  • Software – USD 51 million (EUR 45 million), a 15% increase;
  • Solutions and value-added services – USD 102 million (EUR 91 million), a 48% increase;
  • Televisions – USD 127 million (EUR 113 million), a 27% increase;
  • Small household appliances, etc. – USD 14 million (EUR 12 million), a 654% increase;
  • Built-in equipment – USD 127 million (EUR 113 million), a 25% increase.
"We’re approaching the two billion mark. Last year we achieved our best ever turnover and gross profit indicators. We have not stopped. Growing in a smart way has been planted into the very core of the company; smarter than yesterday, and smarter than our competitors. We are improving ourselves and our internal processes, we are growing our product portfolio, exploring new markets and making significant investments in technology. The combination of these activities, rather than any single component, has ensured our outstanding performance,” Svens Dinsdorfs, ELKO Group Director.
As sales have increased, the need to significantly restructure infrastructure has grown. During the year, ELKO relocated four warehouses to new, modern premises in Riga, Russia, Romania and in the Netherlands thus improving the provided services, and optimising costs.

After operating successfully in the Nordic region for two years ELKO Group bought out the remaining 15% of shares of Gandalf Distribution AB in August 2019, thereby owning a 100%.

The ELKO Group company WESTech, which is one of the largest distributors of IT products in Slovakia, completed the acquisition of ARAŠID in December 2019. With this acquisition they become the exclusive owners of the online shop ProGamingShop.sk and the online shop and retail network MP3.sk.
In accordance to the recommendations by the local governments, most ELKO office employees are currently working remotely and continue to provide all services without interruption. Contactless shipping and receiving of goods is ensured at all warehouses.

Opposite to the overall slowdown in economic growth, ELKO's sales continued to grow in the first quarter of 2020. The explanation for this is that when deliveries from China decreased, leading to a decrease in deliveries in the market as a whole, companies with optimally built-up stocks were able to continue their operations without interruption. Another factor was that many companies actively purchased laptops and other devices in order to prepare their staff for remote work. According to operational data, the Group's turnover and gross profit margin in the first quarter of 2020 increased by 24% and 36%, respectively, compared to the same period in 2019. The Group's quarterly turnover has reached the level laid out in the budget. Due to high demand, ELKO has managed to reduce its old-stock. Chinese companies have begun to return to normal operation, which has meant that the temporary supply disruptions have been eliminated.

"We have branches in 11 countries, and the current situation and the restrictions that have been imposed are different in each of them. The results of the first quarter of this year were very encouraging. Budgets have been implemented in a healthy way in most countries at the start of the second quarter. We feel both confident and cautious at the same time; our experience of previous crises has taught us a lot. We have, however, introduced a number of precautions and controls in case we might still experience a fall in turnover. Our top priority is business continuity. Our agenda now is more focused on what the company should be like after the crisis. It is clear that there will be brand new conditions and new rules in place. It would be wiser for us to align with them rather than to resist. We are actively continuing to work. We are not suspending investments in technological developments, in particular the development of e-commerce platforms," Svens Dinsdorfs.
ELKO Group is one of the region's largest distributors of IT and consumer electronics products and solutions representing 400 IT manufacturers. The company provides a wide range of products and services to more than 10 000 retailers, local computer manufacturers, system integrators and enterprises within various sectors in 31 countries across Europe and Central Asia. The Group’s turnover in 2019 amounted to USD 1 883 million.
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