You’re suddenly talking a lot more about Hyve. How did TD Synnex get into this business, and who does it compete with?
It’s a heritage of Synnex. They had a contract manufacturing division which was started many years ago. Then when the AI hype started, they were well positioned to take advantage of it.
You should look at Hyve as a contract manufacturing, ODM model. The competitors are Flextronics, Jabil, Celestica etc. It has nothing to do with distribution.
Hyve has a very good reputation in the market. 70% of the resources are in the US. With all the focus on sovereignty, that puts us in a favourable position.
You described Q4 as a “strong close” and 2025 as an “outstanding year”. What KPI were you most pleased with either in Q4 or the year as a whole?
I’m going to distinguish between distribution and Hyve, because the dynamics are slightly different.
Let’s start with Hyve. We have very solid demand coming from the two customers we serve today. We have our manufacturing activity and DCSCS – data centre supply chain services. The combination of the two generated very solid top-line growth, margin growth and operating income growth. That’s clearly related to the dynamic in the hyperscaler environment – the massive investments – and we are clearly participating in that.
On the distribution side, the market is at least not declining. It’s low single-digit growth. But three things are working very well for us. We are growing slightly faster than the market, especially Europe, APJ and Latin America. Secondly, the mix is favourable and so our margin is growing slightly faster than the sales. And thirdly, we have very good cost management. We are optimising; we are not doing anything crazy. At the end that transpires into a very nice progression of the profitability.
From a technology standpoint, PCs worked very well for us this year. Roughly 45% of the PCs we sell are now AI PCs. And the tariff, which I know is more applicable to North America, generated some price increases. PC was strong, software was very strong, security was very strong. Public cloud continues to be very strong. Compute was strong. The two technologies which didn’t quite grow were storage and networking. But everything else was very solid.
The strategy of the company is about geo expansion and market share gains. It’s about making sure in every country we add all the missing technologies and vendors to be an end-to-end distributor.
Are there any missing technologies or vendors in the UK/European region?
Our security portfolio in Europe is dramatically improved, but we are missing some important vendors. We’re working on it. We don’t have a gap in technology.
If I go to APJ or Latin America, we’re very weak in endpoint and we want to address it. But in Europe, we are the leading distributor and are very strong in both endpoint and advanced solutions. But within Advanced Solutions, security is the only technology where historically both Tech Data and Avnet were not very strong – and that’s where we are working to close the gap. Relatively speaking, we do better in the UK on security than in the rest of Europe.
Interview continues on final page…
