ELKO Group Reaches 1.5 Billion in Turnover

The acquisition of new markets, expansion of the product range and successful operations in existing markets have enabled the ELKO Grupa to grow faster than the market as a whole.

Major consolidated financial statement data for 2017:

• Revenue USD 1 593 million (EUR 1 409 million), up by 9.1% year-on-year
• Gross profitability 4.9%, up by 1.1 percent point year-on-year
• Gross profit USD 78 million (EUR 69 million), up by 42% year-on-year
• Net profit USD 14 million (EUR 12 million), up by 62% year-on-year

Breakdown of turnover by region

• Central and Eastern Europe – up by 6%, reaching USD 525 million (EUR 464 million)
• CIS region – up by 5.3%, reaching USD 901 million (EUR 797 million)
• Baltic States – up by 8.8%, reaching USD 118 million (EUR 104 million)
• Nordic countries – turnover for July-December was USD 49 million (EUR 43 million)

“We have 25 years of growth behind us, during which time we have increased in size and efficiency. ELKO has stood the test of time and can today count itself as one of the largest distributors of IT products, and solutions in Europe, and Central Asia. We secured last year’s results by improving our reach into existing markets, and by expanding geographically. We predict that this growth rate will not slow down in 2018 either,” Svens Dinsdorfs, CEO of ELKO Group.

Significant events during 2017

During the first half of 2017, ELKO went through a rebranding process by developing new positioning and a visual identity of its brand. The new logo and the story behind it are the first visible evidence of how ELKO is integrated into the transformation of the industry, improving efficiency and ensuring sustainable development.

At the beginning of July 2017, the acquisition of 85% of shares in one of the leading distributors of hardware and electronics in Sweden, Gandalf Distribution AB, was completed. Sales also began in the Polish market by attracting a local sales team for IT and consumer electronics. Starting with the third quarter of 2017, consolidated reports include results for both Gandalf Distribution AB and Poland.

The key factors driving the Company’s growth were a significant expansion of the product portfolio, and the addition of new distribution areas to existing distribution agreements. In 2016, the ELKO Group added about 50 new manufacturers, last year – more than 30, greatly diversifying the product portfolio.

Customer satisfaction is crucial

Operational efficiency and customers’ experience when working with ELKO have been set as the key strategy elements for 2018.

“Customers and partners expect a new approach from distributors these days – to share knowledge about technologies, and the market. As the middleman, a distributor has to secure the kind of infrastructure, and environment that will advance a customer’s, and manufacturer’s growth in specific markets,” explains Svens Dinsdorfs.

ELKO plans on making several notable investments to improve effectivity this year by modernizing and automating business, and e-commerce systems.

“Not everything can, or should be automated, however. It is important to preserve the human element, which is something that automation cannot replace. We are convinced that it is only possible to gain the trust of our customers through relationships founded on a mutual exchange of knowledge, and with our ability to give individual attention, and customized services in every market in which we’re active,” adds Svens Dinsdorfs.

About ELKO

The ELKO Group is one of the region's largest distributors of IT products and solutions, representing 210 IT manufacturers, and providing a wide range of products and services to more than 7 700 retailers, local computer manufacturers, system integrators and enterprises within various sectors in 30 countries across Europe and Central Asia. The Group’s turnover in 2017 amounted to USD 1 593 million.

More information:

www.elkogroup.com

LinkedIn: https://www.linkedin.com/company/elko-group

Facebook: https://www.facebook.com/elkogroup/

Twitter: @ELKO_Group

         Janis Kirsis
         Head of Treasury
         ELKO Grupa AS
         4, Toma Street, Riga, LV-1003, Latvia
         + 371 6709 2357
         janis.kirsis@elkogroup.com