Distributor ELKO Group closed 2019 with high turnover and profitability indicators, it says, as it approaches a turnover of €2bn. Expanding the product portfolio and exploring new markets resulted in the best financial results to date, it claims, while its high level of stockholding enabled it to prosper when China supplies were interrupted.
"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 (pictured), ELKO Group Director.
Gross and net profit rose, with a business breakdown by products:
• Components – USD 487 million (EUR 468 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;
• 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.
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. 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
In spite of an 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, it says. 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.
