AVT
#Okay I'll have each of the Business areas give their update on the growth initiatives starting with <UNK>.
<UNK>.
So growth initiatives for TS, 80% is to support converged infrastructure, flash based storage and anything which has to do with software defined data center.
And then on the sub platform we declared that our focus would be on cloud, would be on mobility, would be on big data analytics and then security to support both the data center and all those new technologies.
So that is what we declared during the Analyst Day last year, and basically nothing has changed.
We are maniacally now executing on growing those technologies, and by the way I can share with you that with one exception we are growing at least double digits on all those initiatives.
So it is going very well.
Again the SBU should accelerate that trend, and the fact that is going to be software driven means that the specialization is going to facilitate the implementation of the acceleration of the implementation of the strategies and the recruitment of the specialized partners and in some cases vendors so that we can improve our value proposition.
Basically we feel very good about the progress we are making still.
Our legacy business, the weight of our legacy business is very high, so that is the reason you don't see yet all the benefits from the top line and margin standpoint, but we are very confident on the progress we are making.
This is <UNK> I will talk about EM.
So our Evergreen strategies around design chain and supply chain, we continue to make investments there.
As we said earlier, Premier Farnell is going to help us engage more deeply with design engineers plus the digital design tools that we put into place starting in the Americas and how we're [rolling out] around the world are helping us increase both our registrations and our design wins.
If you look at our funnel for FY16, registrations were up 11% and our design wins are up 5% so our investments there are paying off.
If you look at what we are doing around digitally transforming our business, both our organic efforts which are helping customers dictate the experience they have with Avnet, both online and off-line, coupled with Premier Farnell we think will be a game changer for us.
I've already talk about our embedded strategy and the growth opportunities we see there.
And there's also a focus as <UNK> and I both talked about at our Investor Day a focus on IoT so at EM we continue to look to grow the three building block technologies, and those will grow faster than the market again for us this year.
So we think we are executing well against our strategies and as we get past our ERP issues it will start to show up in our results.
I think it's a great point because if you look at our quarter this quarter even with our EFP issues we are going to be in our normal seasonal range.
So if you project that past, getting past our ERP issues and getting the benefit from the ERP system around pricing and inventory management, things like that, that should only accelerate our performance.
We have not backed off on the budget we've committed to the Corporation for the fiscal year.
Let me start with Avnet specifics than I will talk a little about what we are seeing in the market, Matt.
If you think about our ERP issues April was not a very good month for us.
Things started to improve in May, and then June was fairly typical.
When you look at the guide, seasonality wise we had a very poor April, so that's part of it.
If you look at our book-to-bill, book-to-bill for us is fairly strong at this point.
We ended the quarter at 1.09 and it has continued at 1.08 with all regions above parity at this point.
So we are seeing that the market is a little stronger than we have seen typically.
I think those two things combined coming out of our ERP issues with the fact that the market, I would say sentiment seems a little stronger.
I think bodes well for us to hit our budget and our seasonality this quarter.
No.
We don't normally talk about out quarters, but what I would tell you is you have to take into account there's ins and there's outs.
We had some wins with some of our biggest suppliers that are coming in so I think what we're just going to have to look at is how those play out and we will keep you updated on any changes to our seasonality going forward.
Yes so the answer is yes, absolutely.
Again if you think about those four new special SBUs their role is ---+ they have several roles.
The first one is to come up with a differentiated value proposition because again it is a software sell so the [key to required] will be different.
The solutions required will be different and so with this specialization approach again that's going to accelerate us being able to define and deliver [both] solutions to the market.
The second priority is going to be to recruit Partners so new Partners who specialize in those areas but also enable our existing Partners who are building practices in those areas.
And the third is to complement our existing line card where needed so that we come up with the best value proposition and line card in the market.
So these are the three objectives, so the answer is yes, and again the SBU is the enabler to make it happen.
And by the way.
And the vendors are identified.
We don't want to add too many vendors.
We strongly believe in limited line card as having the right vendors on the line card.
So it's identified and we started by the way working on it.
Hi, <UNK>, it is <UNK>.
I would expect the EM margins to improve sequentially neighborhood of 30 to 40 basis points and again it's due to the sequential improvement in the Americas to the point that you highlighted earlier coming off the weaker April and then the ERP running more smoothly as we work through the September quarter.
<UNK>, that is the right way to be thinking about it.
The extra week had more of an impact on the TS business, so right way to think about it.
So I just had one thing if you normalize it, so if you normalize our quarter last year, remove the extra week and you remove the embedded business which has been transferred to EM.
In fact we are forecasting to have flat operating margins year-on-year.
Thank you for participating in our earnings call today.
Our fourth-quarter FY16 earnings Press Release and related [CFO] commentary can be accessed in downloadable PDF format at our website, www.ir.avnet.com under the Quarterly Results section.
Thank you.
