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Monié Aims to End Ingram’s Aussie Troubles

Monié: “well short of our goal” in region

Getting operations in Australia back in the black and growing again are top priorities this year for Ingram Micro Inc. Chief Executive Alain Monié.

The region, part of company’s Asia-Pacific operation, continues to hamper revenue and earnings for Ingram. The company has struggled to regain customers in Australia following a major operational glitch more than two years ago.

Ingram is the biggest distributor of computers, software, and other technology products in the world and operates on very narrow margins.

The company’s revenue was $37.8 billion in 2012, up 4.1% from a year earlier. It posted earnings of $306 million, up 25.2%.

Those gains came despite an operating loss of nearly $40 million in Australia last year, according to executives and regulatory filings.

That was better than an operating loss of more than $50 million in 2011.

That’s still “well short of our goal,” Monié said in a recent call with analysts.

“Our 2012 performance in Australia is clearly unacceptable; this year is going to be the turnaround,” he said.

Problems with a new electronic logistics system in Australia first surfaced in early 2011, causing Ingram to widely miss Wall Street profit targets in the first quarter of the year.

The software and hardware systems overhaul was designed to improve the automation behind services for customers and vendors. Glitches in linking Ingram’s proprietary warehouse management system with the new system caused a backlog and other logistical problems internally and for customers.

The company spent most of the first half of 2011 working to fix the problem. It has continued efforts to smooth out the system and regain customers lost to competitors since then.

Competitors in Australia include Dicker Data Ltd. in New South Wales and Synnex Technology International Ltd., the Hong Kong-based unit of Synnex Corp. in Northern California.

Ingram has launched several initiatives in the Australia region in the last six months to spur growth and cut costs, including a management change and job shifts. It moved 100 call-center jobs from Australia to the Philippines a few months ago.

Late last year it tapped company veteran Matt Sanderson to head up its Australia operations. Sanderson led vendor management in Australia in a prior stint, and also has worked in Ingram’s unit that targets small and medium-sized businesses in the U.K.

The company also recently deployed a specialized team to provide more training on the software and hardware systems as part of the bid to boost sales and margins.

Ingram is making strides on both targets, according to Damon Wright, executive director of investor relations.

“We are winning back customers and signing new vendors,” he said. “We are gaining back confidence.”

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