Avnet, Inc. · NASDAQ:AVT

Avnet — Investor Day (December 2004)

104 slides from Avnet's investor day presentation, Dec 14, 2004

1. Slide 1: Welcome to Analyst Day

   Avnet Analyst Day – December 14, 2004 Welcome to Analyst Day December 14, 2004 Avnet – Enabling Success from the Center of Technology 1 Enabling Success from the Center of Technology™

2. Slide 2: Opening Remarks & Introductions

   Avnet Analyst Day – December 14, 2004 Opening Remarks & Introductions Vince Keenan Director/VP Investor Relations 2 Enabling Success from the Center of Technology™

3. Slide 3: Analyst Day Agenda

   Avnet Analyst Day – December 14, 2004 Analyst Day Agenda ƒ Tuesday, December 14, 2004 ƒ 8:00 am Registration and Breakfast ƒ 8:45 am Opening Remarks and Introductions Vince Keenan – VP, IR ƒ 9:00 am Overview of the Market and Avnet, Inc. Roy Vallee – Chairman & CEO ƒ 9:45 am Financial Report Ray Sad

4. Slide 4: Management Introductions

   Avnet Analyst Day – December 14, 2004 Management Introductions Roy Vallee Ray Sadowski Chairman and Sr. Vice President, Avnet, Inc. Chief Executive Officer Chief Financial Officer Harley Feldberg Rick Hamada Sr. Vice President, Avnet, Inc. Sr. Vice President, Avnet, Inc. President, Electronics Marke

5. Slide 5: Management Introductions

   Avnet Analyst Day – December 14, 2004 Management Introductions Andy Bryant Sr. Vice President, Avnet, Inc. President, Avnet Logistics Al Maag Vice President, Avnet, Inc. Chief Marketing Officer 5 5 Enabling Success from the Center of Technology™

6. Slide 6: Non-GAAP Results and Regulation G

   Avnet Analyst Day – December 14, 2004 Non-GAAP Results and Regulation G ƒ In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles (GAAP), the Company also discloses pro forma or non-GAAP results of operations that exclude certain it

7. Slide 7: Safe Harbor Statement

   Avnet Analyst Day – December 14, 2004 Safe Harbor Statement ƒ This presentation contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on management’s current exp

8. Slide 8: Overview of the Market & Avnet, Inc.

   Avnet Analyst Day – December 14, 2004 Overview of the Market & Avnet, Inc. Roy Vallee – Chairman & Chief Executive Officer 8 Enabling Success from the Center of Technology™

9. Slide 9: Avnet = Global Scale & Scope

   Avnet Analyst Day – December 14, 2004 Avnet = Global Scale & Scope FY2004 Revenue - $10.2B ƒ Provides local touch through Revenue by Operating Group more than 275 locations worldwide ƒ Does business in 68 countries 40% ƒ Serves more than 100,000 customers 60% ƒ Manages more than 300 franchised suppl

10. Slide 10: Avnet Executive Board

    Avnet Analyst Day – December 14, 2004 Board Board of of Directors Directors Roy Roy Vallee Vallee Avnet Avnet Avnet, Executive ExecutiveBoard Board Avnet,Inc. Inc. OPERATING GROUPS Harley Feldberg Rick Hamada Electronics Marketing Technology Solutions CORPORATE SERVICES David Birk Steve Church Andy

11. Slide 11: Avnet's Vision

    Avnet Analyst Day – December 14, 2004 Avnet’s Vision Avnet will deliver the highest value to our customers, suppliers, employees and shareholders as the premier technology marketing, distribution and services company, globally. 11 11 Enabling Success from the Center of Technology™

12. Slide 12: Electronics Marketing

    Avnet Analyst Day – December 14, 2004 Electronics Marketing Americas Design Chain EMEAServices Engineering & Design Support Supply Chain Services Services & Solutions Expansion Core Distribution Services Financial Strength & Inventory Competency 12 12 Enabling Success from the Center of Technology™

13. Slide 13: Technology Solutions

    Avnet Analyst Day – December 14, 2004 Technology Solutions Enterprise IT Products Avnet Partner Solutions IT Components Avnet Computing Components Embedded OEM Subsystems Avnet Applied Computing Solutions Networking and Visual & Data Avnet Enterprise Solutions / Avnet Visual + Data Solutions 13 13 E

14. Slide 14: Total Available Market (includes services)

    Avnet Analyst Day – December 14, 2004 Avnet Total Available Market (includes services) Total TAM: $556B $594B $667B $703B $731B $789B 800 8% 6% 4% 700 12% 7% 600 1% 6% 500 6% Revenue ($B) 6% 7% 400 4% 3% 300 200 4% 1% 11% 100 13% 23% -2% 0 2002 2003 2004 2005 2006 2007 Electronics Marketing Technolo

15. Slide 15: Component Distribution is Gaining Market Share

    Avnet Analyst Day – December 14, 2004 Component Distribution is Gaining Market Share… 1996 2003 2006 $165B $225B $300B Direct EMS Direct Direct 48% 39% 23% 57% EMS 19% 18% EMS 10% 14% 5% 21% 23% 25% ODM ODM ODM Distribution Distribution Distribution EMS: Electronics Manufacturing Services providers

16. Slide 16: Components Distribution Consolidation Has Occurred

    Avnet Analyst Day – December 14, 2004 Components Distribution Consolidation Has Occurred ($ in billions) 1997 Current [4 Quarters ended September 2004] ($ in billions) Arrow $10.6 Arrow $7.8 Avnet $10.4 Avnet* $5.4 VEBA $3.7 Future Electronics* $2.8 Marshall $2.2 Bell Micro $2.7 Pioneer-Standard $1.

17. Slide 17: Component Industry – Changing Market Cycles

    Avnet Analyst Day – December 14, 2004 Component Industry – Changing Market Cycles Worldwide Semiconductor Revenue vs. Growth Rates 300 60% 50% 250 40% 30% 200 ($ Billions) 20% 150 10% 0% 100 -10% -20% 50 -30% 0 -40% 2005E 2006E 2007E 2004E 1997 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1998

18. Slide 18: Component Industry – Changing Market Cycles

    Avnet Analyst Day – December 14, 2004 Component Industry – Changing Market Cycles Worldwide Semiconductor Revenue vs. Growth Rates 300 60% Unprecedented 50% 5 poor years 250 Market averages 4 growth years for every 1 down year vs. 2 strong New paradigm? 40% growth years 30% 200 ($ Billions) 20% 150

19. Slide 19: Market Forces Impacting Component Cycle

    Avnet Analyst Day – December 14, 2004 Market Forces Impacting Component Cycle ƒ Increased demand from consumer markets ƒ High volume applications, short product lifecycles ƒ Increased role of semiconductor foundries ƒ Managed/rational capacity expansion driven by multiple products/applications ƒ Inc

20. Slide 20: Implications For Component Distribution

    Avnet Analyst Day – December 14, 2004 Implications For Component Distribution ƒ Cycles could be more frequent and lower amplitude ƒ Would improve shareholder value creation ƒ Outsourcing creates more complexity ƒ Design activity separated from production ƒ Demand management global, manufacturing reg

21. Slide 21: IT Industry - Growth of Industry Standard Servers

    Avnet Analyst Day – December 14, 2004 IT Industry - Growth of Industry Standard Servers US$M Phase 5 $50,000 Phase 4 “New” On Demand Phase 3 Disruption of the e-business $40,000 “New” Client Workloads RISC/Unix Server Market Workloads $30,000 Phase 2 Disruption of $20,000 Phase 1 the “New” Mainframe

22. Slide 22: Implications for Enterprise Computer Distributors

    Avnet Analyst Day – December 14, 2004 Implications for Enterprise Computer Distributors ƒ ROI justified solutions will raise the bar for VARs ƒ Shift from infrastructure to business solutions ƒ More emphasis on integration of software and services ƒ SMB market more attractive ƒ ISVs, SIs and consult

23. Slide 23: Strategic Framework

    Avnet Analyst Day – December 14, 2004 Strategic Framework Attract, develop and engage the best employees while building a driving value culture People Development Driving Value Culture Performance and values based Avnet Core Values Integrity Customer Service Accountability Teamwork Innovation 23 23

24. Slide 24: People Development Initiatives

    Avnet Analyst Day – December 14, 2004 People Development Initiatives ƒ Develop global corporate culture ƒ Extend Americas’ infrastructure to global offerings ƒ Shareholder value creation Attract, develop ƒ Empower employees to make decisions closer to the and engage the customer best employees while

25. Slide 25: Strategic Framework

    Avnet Analyst Day – December 14, 2004 Strategic Framework Deliver the highest level of Attract, develop productivity and engage the within our best employees industry peer while building group. Create a a driving more variable cost model. value culture Operational People Excellence Development Drivi

26. Slide 26: Operational Excellence

    Avnet Analyst Day – December 14, 2004 Operational Excellence ƒ Maintain significant operating leverage Deliver the highest level of through disciplined expense management productivity within our ƒ Operating expense % of net gross profit industry peer group. Create a ƒ Allocate resources utilizing “d

27. Slide 27: Operational Excellence – CIO Initiatives

    Avnet Analyst Day – December 14, 2004 Operational Excellence – CIO Initiatives Improve Customer Service Enhanced Operational Improve Expense Productivity Excellence Improve Working Capital Productivity Key Customer Self End to End Employee Initiatives Service Connectivity Programs Sales and Marketin

28. Slide 28: Operational Excellence – CIO Initiatives

    Avnet Analyst Day – December 14, 2004 Operational Excellence – CIO Initiatives Reduce Cost Enhanced Operational Reduce Cycle Excellence Avnet Ranked # 3 as Improve Customer Service leading user of business technology by Avnet ranked # 4 Information Week Key Customer Self End to End Materials Initiat

29. Slide 29: Strategic Framework

    Avnet Analyst Day – December 14, 2004 Strategic Framework Become the Deliver the preferred Attract, develop highest level of channel partner productivity and engage the for our within our best employees Customers and industry peer while building Suppliers and group. Create a a driving accelerate mor

30. Slide 30: Growth Initiatives

    Avnet Analyst Day – December 14, 2004 Growth Initiatives ƒ Grow profitably through business Become the units preferred channel partner ƒ Deepen engagement with current customers for our ƒ New franchises Customers and Suppliers and ƒ New customers accelerate Services growth ƒ New geographies ƒ New se

31. Slide 31: Growth Initiatives

    Avnet Analyst Day – December 14, 2004 Growth Initiatives Higher Returns Profitable Growth Become the Avnet Logistics Services preferred channel partner SOLUTIONS for our Design Chain Services Customers and Suppliers and accelerate Supply Chain Services Request to Quote Tools Services growth Value SE

32. Slide 32: Drive ROCE > WACC and Achieve Profitable Growth

    Avnet Analyst Day – December 14, 2004 Drive ROCE > WACC and Achieve Profitable Growth Become the Deliver the preferred Attract, develop highest level of channel partner productivity and engage the for our within our best employees Customers and industry peer while building Suppliers and group. Creat

33. Slide 33: Value-Based Management

    Avnet Analyst Day – December 14, 2004 Value-Based Management ƒ Leadership ƒ Management team committed to the cultural change process ƒ Customer / ƒ Customer, supplier and product portfolio targeted Supplier to optimize “good revenue” ƒ Compensate on KPMs ƒ Compensation related to ROCE > WACC ƒ Shift

34. Slide 34: Avnet – A New Era

    Avnet Analyst Day – December 14, 2004 Avnet – A New Era Value Creation Era • Leverage scale and scope advantages to accelerate profitable growth • Create shareholder value Restructure Phase • Dramatic industry downturn VBM • Restructured cost and debt Launched Consolidation Era • Employee culture ch

35. Slide 35: Investment Thesis – Shareholder Value Creation

    Avnet Analyst Day – December 14, 2004 Investment Thesis – Shareholder Value Creation ƒ Technology supply chain secular growth (8 – 12% growth rate) ƒ Global leader in technology distribution – scale and scope advantages ƒ Extensive supplier/customer relationships – Avnet’s intellectual capital ƒ Str

36. Slide 36: Q&A

    Avnet Analyst Day – December 14, 2004 Q&A 36 Enabling Success from the Center of Technology™

37. Slide 37: Financial Report

    Avnet Analyst Day – December 14, 2004 Financial Report Ray Sadowski – Chief Financial Officer 37 Enabling Success from the Center of Technology™

38. Slide 38: Quarterly Revenue Performance

    Avnet Analyst Day – December 14, 2004 Quarterly Revenue Performance Q1 ’05 FY 2004 Y-O-Y Growth = 13% Y-O-Y Gr = 8%* $3.0 FY 2003 Y-O-Y Growth = 1% $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Electronics Marketing Technology Solutions * Year over year

39. Slide 39: Gross Profit Margins

    Avnet Analyst Day – December 14, 2004 Gross Profit Margins Gross Profit variability driven primarily by business mix 14.2% 13.9% 13.8% 13.7% 13.6% 13.5% 13.5% 13.4% 13.4% 13.1% 13.0% 12.9% 12.8% 12.6% 12.2% Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 39 39 Enabling Success from th

40. Slide 40: Operating Expenses (Before special items)

    Avnet Analyst Day – December 14, 2004 Operating Expenses (Before special items) Expense to Sales Expense to GP Dollars 13% 95% 12.8% 93.3% 93% 13% 91% 90.0% * 89.2% 12.1% * 12.0% 89% 12% 88.2% 86.9% 87% * 11.6% 12% 85% 11.2% * 83% 82.5% * 11% 81% 10.8% 10.7% 79.4% 10.6% * 10.6% 79% 79.1% 11% 77% 76.

41. Slide 41: Inventory Turns

    Avnet Analyst Day – December 14, 2004 Inventory Turns Range: EM: 3.9 – 5.1 1,600,000 9.0 TS: 10.9 – 22.8 1,400,000 8.0 1,200,000 7.0 6.0 1,000,000 5.0 800,000 4.0 600,000 3.0 400,000 2.0 200,000 1.0 0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2003 2003 2003 2003 2004 2004 2004 2002 2005 Inventory Inventory Tur

42. Slide 42: Improved Operating Leverage

    Avnet Analyst Day – December 14, 2004 Improved Operating Leverage Operating Income Margin Working Capital Velocity 3.5% 3.2% 7.0 6.1 2.8% 5.4 3.0% 2.8% 6.0 5.7 5.4 5.5 5.2 5.0 5.1 2.5% 2.3% 5.0 4.4 2.0% 1.7% 4.0 1.6% 1.4% 1.4% 1.5% 3.0 0.9% 1.0% 2.0 0.5% 1.0 0.0% 0.0 Sep-02 Dec-02 Mar-03 Jun-03 Sep-

43. Slide 43: Return on Working Capital

    Avnet Analyst Day – December 14, 2004 Return on Working Capital 20.0% 18.0% 17.5% 16.0% 16.0% 14.5% 14.0% 13.8% 12.0% 10.0% 9.3% 8.4% 8.0% 7.4% 6.8% 6.0% 4.0% 4.0% 2.0% 0.0% Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 * Operational Return on Working Capital is calculated by taking

44. Slide 44: Strengthened Balance Sheet

    Avnet Analyst Day – December 14, 2004 Strengthened Balance Sheet (in millions) Liquidity/Financing Strategy: 2,000 30 1,800 ƒ Target $500 million - $1 billion in 1,600 25 1,400 liquidity, depending upon market 20 1,200 1,000 15 condition 800 600 10 ƒ Feb 05 maturities of $87M to be paid 400 5 200 fr

45. Slide 45: Long-term business model

    Avnet Analyst Day – December 14, 2004 Long-term business model Prior Cycle Peak Range* 2004 Actual 3-5 Year Goal Operating Income Margin EM 7.5 - 7.8% 3.6% 6.0 - 7.0% TS 3.2 - 3.5% 2.3% 2.9 - 3.5% Avnet 5.3 - 5.6% 2.5% 4.5 - 5.0% WC Velocity Avnet 4.2 - 4.4 5.7 6.0 - 7.0 ROWC Avnet 22.3 - 24.7% 14.4

46. Slide 46: Leverage – Operating Income Drop Through

    Avnet Analyst Day – December 14, 2004 Leverage – Operating Income Drop Through Restructure Phase Growth Era FY 2003 FY 2004 $100 300% $90 195% 185% 200% Operating Income ($-M) $80 73% 74% 80% Drop Through - % $70 100% $60 0% $50 -117% -70% -164% -100% $40 $30 -200% -353% $20 -300% $10 $0 -400% Sep-0

47. Slide 47: Operating Group Business Models

    Avnet Analyst Day – December 14, 2004 Operating Group Business Models Electronics Marketing * Technology Solutions Attributes Revenue Growth More Volatile Less Volatile Gross Profit Margin Higher Gross Profit Margin Lower Gross Profit Margin SG&A Expenses Higher SG&A Expenses Lower SG&A Expenses Ope

48. Slide 48: VBM Initiative – Driving Performance

    Avnet Analyst Day – December 14, 2004 VBM Initiative – Driving Performance VBM Metrics are a primary driver of variable compensation CEO, CFO & Corp Executives Net Income/NIBT & ROCE Operating Group Presidents 75% Group NIBT & ROCE 25% Corp. NIBT & ROCE Regional/Divisional Leadership Regional/Divisi

49. Slide 49: Electronics Marketing – Year Performance

    Avnet Analyst Day – December 14, 2004 Electronics Marketing – 3 Year Performance Goal $5,528 Return on Working Capital $-M Americas – EMEA – Asia – $2,462 $2,132 $1,299 EM Global $2,289 $469 Negative Growth High Growth Year over Year Revenue Growth 49 49 Enabling Success from the Center of Technolog

50. Slide 50: Technology Solutions – Year Performance

    Avnet Analyst Day – December 14, 2004 Technology Solutions – 3 Year Performance $156 $-M $2,948 Americas – EMEA – Return on Working Capital Asia – TS Global $3,217 Goal $1,223 $87 $1,248 Negative Growth Year over Year Revenue Growth High Growth 50 50 Enabling Success from the Center of Technology™

51. Slide 51: Summary

    Avnet Analyst Day – December 14, 2004 Summary ƒ Well positioned for profitable growth through cycles ƒ Distribution infrastructure at 60% to 70% capacity ƒ Low fixed cost structure ƒ Focus on operational excellence ƒ Cost reduction by streamlining and automating processes ƒ Leverage realized in fisc

52. Slide 52: Q&A

    Avnet Analyst Day – December 14, 2004 Q&A 52 Enabling Success from the Center of Technology™

53. Slide 53: Break

    Avnet Analyst Day – December 14, 2004 Break 53 Enabling Success from the Center of Technology™

54. Slide 54: Welcome to Analyst Day

    Avnet Analyst Day – December 14, 2004 Welcome to Analyst Day December 14, 2004 Avnet – Enabling Success from the Center of Technology Q4’03 Enabling Success from the Center of Town Hall Technology™ 1

55. Slide 55: Electronics Marketing

    Avnet Analyst Day – December 14, 2004 Electronics Marketing Harley Feldberg – President, Electronics Marketing Q4’03 Enabling Success from the Center of Town Hall Technology™ 2

56. Slide 56: Topics Covered

    Avnet Analyst Day – December 14, 2004 Topics Covered I. Distribution’s increasingly important role in the changing landscape of electronic components consumption II. Implications for Distributors going forward III. Avnet EM’s Go-to-Market Strategy Q4’03 Town Hall 3 33 Enabling Success from the Cente

57. Slide 57: The Changing Landscape

    Avnet Analyst Day – December 14, 2004 The Changing Landscape… ƒ Industry maturation and globalization requiring greater levels of operational efficiency ƒ Market dynamics requiring rigorous inventory monitoring and management Q4’03 Town Hall 4 44 Enabling Success from the Center of Technology™

58. Slide 58: The Changing Landscape

    Avnet Analyst Day – December 14, 2004 The Changing Landscape… ƒ Industry maturation and globalization requiring greater levels of operational efficiency ƒ Market dynamics requiring rigorous inventory monitoring and management ƒ Outsourcing to EMS/ODM creating greater supply chain complexity, requiri

59. Slide 59: Contract Manufacturers Continue to Play a Key Role in the Supply Chain

    Avnet Analyst Day – December 14, 2004 Contract Manufacturer’s Continue to Play a Key Role in The Supply Chain EMS & ODM Semi Spend and Total Semi Market, 2003-2007 300,000 50.0% 250,000 40.0% 200,000 30.0% 150,000 20.0% 100,000 50,000 10.0% - 0.0% 2003 2004 2005 2006 2007 Total EMS / ODM Total Semi

60. Slide 60: The Changing Landscape

    Avnet Analyst Day – December 14, 2004 The Changing Landscape… ƒ Industry maturation and globalization requiring greater levels of operational efficiency ƒ Market dynamics requiring rigorous inventory monitoring and management ƒ Outsourcing to EMS/ODM creating greater supply chain complexity, requiri

61. Slide 61: Dynamic Regional Shifts in Electronic Components

    Avnet Analyst Day – December 14, 2004 Dynamic Regional Shifts in Electronic Components… Semiconductor Revenue by Region Share of WW Revenue 120 2003 2007 Asia Pacific 37.8% 42.7% 100 80 ($ billions) Japan 60 23.4% 22.0% Europe 19.4% 18.2% 40 19.4% 17.1% North America 20 0 1989 1990 1991 1992 1993 19

62. Slide 62: Implications for Component Distributors

    Avnet Analyst Day – December 14, 2004 Implications for Component Distributors ƒ Global infrastructure and scale creates distinct advantage ƒ Business capture ƒ Optimized component costs ƒ Inventory management risk mitigation ƒ Balancing of regional market cycles ƒ Leverage economies of scale Q4’03 T

63. Slide 63: Electronics Marketing

    Avnet Analyst Day – December 14, 2004 Avnet Electronics Marketing ƒ Top tier electronics distributor with over 275 global locations, serving customers in 68 countries, with approximately 7000 employees worldwide Norway Sweden Denmark Canada U.K. Ireland TONGEREN, Belgium France POING, Germany U.S.A.

64. Slide 64: Revenue Generation by Region

    Avnet Analyst Day – December 14, 2004 Revenue Generation by Region FY 1999 FY2004 EM Asia EM Asia EM Americas 5% 22% 42% EMEA 23% EM Americas EMEA 72% 36% ƒ Avnet EM’s investments in global expansion over the last 5 years have positioned us with a strong global portfolio Q4’03 Town Hall 1111 11 Enab

65. Slide 65: Implications for Components Distributors

    Avnet Analyst Day – December 14, 2004 Implications for Components Distributors ƒ Breadth of Line Card offers a distinct advantage ƒ Broad line offering in line with supply chain growth trends ƒ Core chip design win and capture of rest-of-board ƒ Risk mitigation from reduced dependence on any single

66. Slide 66: EM's Superior Supplier Position

    Avnet Analyst Day – December 14, 2004 Avnet EM’s Superior Supplier Position ƒ Currently have one of the best line Preliminary WW 2004 Top Semiconductor Market Share cards in the world, representing 2003 Ranking (Millions $) 2004 Company those suppliers that are true market Rank Rank makers in their

67. Slide 67: Implications for Components Distributors

    Avnet Analyst Day – December 14, 2004 Implications for Components Distributors ƒ Breadth of Customer Base creates distinct advantage ƒ Mix of OEM business served direct and served through EMS requires both Design chain and supply chain competencies ƒ Inventory risk mitigation ƒ Reduced risk associat

68. Slide 68: EM's Breadth of Market

    Avnet Analyst Day – December 14, 2004 Avnet EM’s Breadth of Market ƒ Currently serve 100,000+ customer sites across a broad-breadth of end-markets ƒ ~60% OEM’s served directly through design chain / supply chain relationships ƒ ~40% OEMs served indirectly through contract manufacturing ƒ All major c

69. Slide 69: Implications for Components Distributors

    Avnet Analyst Day – December 14, 2004 Implications for Components Distributors ƒ Breadth of Service/Solutions creates distinct advantage ƒ Growing global demand for Supply Chain Solutions ƒ Compliance Solutions becoming requirements / opportunities ƒ RoHS Q4’03 Town Hall 1616 16 Enabling Success fro

70. Slide 70: Supply Chain Service Solutions

    Avnet Analyst Day – December 14, 2004 Supply Chain Service Solutions Vendor SUPPLY CHAIN Inplant JIT Managed Consignment MODELS Stores Inventory TOOLS & Programming Rosetta EDI Services Net POURS Promiere SERVICES Customer Forecast FORECAST Forecast Forecast Exception Liability COCKPIT Flexibility A

71. Slide 71: What is our Market Outlook?

    Avnet Analyst Day – December 14, 2004 What is our Market Outlook? Q4’03 Town Hall 1818 18 Enabling Success from the Center of Technology™

72. Slide 72: Component Distribution is Vital and Gaining Share

    Avnet Analyst Day – December 14, 2004 Component Distribution is Vital and Gaining Share 1996 2003 2006 $147B $200B $265B Direct Direct $198 Direct $154 $116 $31 $46 $67 Distribution Distribution Distribution ƒ More suppliers are focusing on a narrower band of direct customers Sources: Gartner, SIA/W

73. Slide 73: Global Distributors Have a Distinct Advantage

    Avnet Analyst Day – December 14, 2004 Global Distributors Have a Distinct Advantage… Calendar Year 2003 versus 2002 Avnet Global Components 7.3% Top 75 Americas (Less Avt & Arw) -11.61% Source: Purchasing Magazine Q4’03 Town Hall 2020 20 Enabling Success from the Center of Technology™

74. Slide 74: What is our Go-to-Market Strategy?

    Avnet Analyst Day – December 14, 2004 What is our Go-to-Market Strategy? Q4’03 Town Hall 2121 21 Enabling Success from the Center of Technology™

75. Slide 75: Electronics Marketing – Value Elements Common Across All Regions

    Avnet Analyst Day – December 14, 2004 Electronics Marketing – Value Elements Common Across All Regions Americas Design Chain EMEAServices Engineering & Design Support Supply Chain Services Services & Solutions Expansion Core Distribution Services Financial Strength & Inventory Competency Q4’03 Town

76. Slide 76: Strategy and Structure Primarily Regional

    Avnet Analyst Day – December 14, 2004 Strategy and Structure Primarily Regional ƒ Business models vary dramatically by region/country ƒ Majority of our business is conducted within a region/country with a growing portion transacting across country boundaries ƒ Avnet EM well positioned to offer local

77. Slide 77: EM Americas

    Avnet Analyst Day – December 14, 2004 EM Americas ƒ Market Nuances ƒ Mature market ƒ Outsourcing phenomenon strong ƒ Sophisticated Supply Chain Solution business environment ƒ Business migration largely from Americas to Asia ƒ EM Americas Strategic Position ƒ #2 in Semiconductors, #1 in IP&E ƒ Scale

78. Slide 78: EM EMEA

    Avnet Analyst Day – December 14, 2004 EM EMEA ƒ Market Nuances ƒ Established distribution market ƒ Country-specific service models required ƒ Large industrial account base values design-chain focused strategy ƒ Supply chain solution acceptance gaining traction ƒ Business migration largely from Weste

79. Slide 79: EM Asia

    Avnet Analyst Day – December 14, 2004 EM Asia ƒ Market Nuances ƒ Hyper-growth market ƒ High volume, low margin, high inventory velocity business model ƒ Emerging distribution market – China: Top 10 Distributors manage <25% of DTAM ƒ Strong local Distributor/Trader model that leverages historic relat

80. Slide 80: EM Global Growth Initiatives

    Avnet Analyst Day – December 14, 2004 EM Global Growth Initiatives ƒ Global Customer and Supplier Support ƒ Global customer support for multi-regional business ƒ Supplier relationship expansion and extension across regions ƒ Capability Expansion and Best-Practice Sharing ƒ Supply-Chain solutions dev

81. Slide 81: Summary

    Avnet Analyst Day – December 14, 2004 Summary ƒ Avnet Electronics Marketing is well poised to be the market leader in the changing electronic components environment. ƒ Our ability to leverage our global infrastructure gives us enhanced negotiating power and greater economies of scale. ƒ Our regional

82. Slide 82: Q&A

    Avnet Analyst Day – December 14, 2004 Q&A Q4’03 Enabling Success from the Center of Town Hall Technology™ 29

83. Slide 83: Technology Solutions

    Avnet Analyst Day – December 14, 2004 Technology Solutions Rick Hamada – President, Technology Solutions Q4’03 Enabling Success from the Center of Town Hall Technology™ 30

84. Slide 84: Technology Solutions: Team Mission

    Avnet Analyst Day – December 14, 2004 Technology Solutions: Team Mission To Accelerate the Success of Our Customers, Suppliers and Team Q4’03 Town Hall 3131 31 Enabling Success from the Center of Technology™

85. Slide 85: Technology Solutions Businesses

    Avnet Analyst Day – December 14, 2004 Technology Solutions Businesses Enterprise IT Embedded OEM Networking and IT Products Components Subsystems Visual & Data Avnet Avnet Avnet Avnet Partner Solutions Computing Applied Computing Enterprise ‹ Components Solutions Solutions Americas ‹ ‹ ‹ EMEA (9 cou

86. Slide 86: Technology Solutions Partners

    Avnet Analyst Day – December 14, 2004 Technology Solutions Partners Q4’03 Town Hall 3333 33 Enabling Success from the Center of Technology™

87. Slide 87: TS Global Supplier Revenue Mix – FY'04

    Avnet Analyst Day – December 14, 2004 TS Global Supplier Revenue Mix – FY’04 HP 13% IBM 44% AMD 10% ITL 4% EZO CSC 4% MCN ORA 3% All Oth STK 2% 2% 16% 2% Q4’03 Town Hall 3434 34 Enabling Success from the Center of Technology™

88. Slide 88: Technology Solutions Global TAM

    Avnet Analyst Day – December 14, 2004 Technology Solutions Global TAM TS Total Available Market 600 6% 6% 13% 6% overall 9% overall 500 overall 6% 3% -3% 3% 5% 7% 4% 2% 7% overall overall overall 3% overall 5% 9% -22% -8% 4% 400 13% -4% 7% 7% -1% Revenue ($B) -21% -2% 7% 16% 4% 35% 18% 1% 16% 8% 300

89. Slide 89: Value Migrating to Solutions

    Avnet Analyst Day – December 14, 2004 Value Migrating to Solutions… S/W and Services to improve Business Value business performance (ROI) BP role: ISVs, SIs and Consultants H/W and S/W integrated into Infrastructure Value computing environment (Cost) BP role: H/W and S/W resellers Technology Value T

90. Slide 90: Value Propositions Have Life Cycles Too

    Avnet Analyst Day – December 14, 2004 Value Propositions Have Life Cycles Too… SOLUTIONS AND SUPPLY CUSTOMIZED CHAIN INTEGRATION DESIGN AND AUTHORIZED CONSULTING VALUE ASSEMBLY INVENTORY, WAREHOUSING AND LOGISTICS 1970’s – 1980’s 1990’s 2000 - today Today – Future Technical and Solutions Expertise Q

91. Slide 91: TS Value Creation Environment

    Avnet Analyst Day – December 14, 2004 TS Value Creation Environment OEMs SUPPLIERS E N IT VARs D TRAINING Solution U Solution FINANCE Demand Provisioning Order Acquisition Engineering Mining INTEGRATORS S LOGISTICS E R S Products & Key Questions Solving Technologies 1) Which products/technologies to

92. Slide 92: TS Value Proposition Spectrum

    Avnet Analyst Day – December 14, 2004 TS Value Proposition Spectrum Cost focus ROI focus SUPPLIERS U E S N E Solution Order D R Solution Demand Provisioning Acquisition Engineering Mining S Key Metrics: Key Metrics: - Basic SG&A - ROI by channel - Working Capital requirements - Utilization/realizati

93. Slide 93: TS Detailed Value Proposition

    Avnet Analyst Day – December 14, 2004 TS Detailed Value Proposition Competency Supplier Value Customer Value Focused and targeted Scope, scale and quality of “Demand Mining” development of primary demand marketing resource to maximize creation utilization Knowledgeable, responsive Ability to tap int

94. Slide 94: Solutions from Standard Components

    Avnet Analyst Day – December 14, 2004 Solutions from Standard Components ƒ Industry Standard Servers vs. RISC ƒ Windows vs. Linux (Commercial & OEM) 40% ƒ .Net vs. Java 33% ƒ ATS Americas commodity segments: FY ’04 Y-t-Y ƒ Hardware: up 1% 19% ƒ Storage Solutions: up 19% ƒ Industry Standard Servers:

95. Slide 95: Strategic Initiatives: Operational Excellence

    Avnet Analyst Day – December 14, 2004 Strategic Initiatives: Operational Excellence ƒ Readying Supply Chain for Standards ƒ Moving from closed source to open source ƒ Re-aligning procurement sources and processes ƒ Leverage IT ƒ Customer Self-Service ƒ R2O, Channel Connection ƒ End-to-End Connectivi

96. Slide 96: Strategic Initiatives: Growth

    Avnet Analyst Day – December 14, 2004 Strategic Initiatives: Growth ƒ Build on Software and Services Growth ƒ Continue to look for opportunities to build solutions ƒ Growth here 2X hardware growth rates for next 5 yrs. ƒ Developing Business Value Influencers as Partners and Customers (ISVs & SIs) ƒ

97. Slide 97: Maximum Availability: Influencer

    Avnet Analyst Day – December 14, 2004 Maximum Availability: Influencer ƒ ISV specializing in Data & Object Replication and High Availability software for IBM iSeries ƒ Partnership to market and sell MA’s “*noMAX” solution to the reseller channel ƒ Avnet is paid to help market the solution ƒ Avnet an

98. Slide 98: ProQuest: From Design to Delivery

    Avnet Analyst Day – December 14, 2004 ProQuest: From Design to Delivery ƒ $450 million publisher of information solutions ƒ “No Touch” solution from engineering design through integration, shipped directly to end-user ƒ Labeled under ProQuest ƒ Integration and supply chain management ƒ Servers, PCs,

99. Slide 99: Accelerating Value for Shareholders

    Avnet Analyst Day – December 14, 2004 Accelerating Value for Shareholders ƒ Serving multiple segments of the supply chain ƒ Partnered with leading technology suppliers ƒ Focusing on high growth segments ƒ Optimized for Industry Trends: ƒ It’s all about solutions ƒ It’s all about standards ƒ Value pr

100. Slide 100: Q&A

     Avnet Analyst Day – December 14, 2004 Q&A Q4’03 Enabling Success from the Center of Town Hall Technology™ 47

101. Slide 101: Investment Thesis

     Avnet Analyst Day – December 14, 2004 Investment Thesis Roy Vallee – Chairman & Chief Executive Officer Q4’03 Enabling Success from the Center of Town Hall Technology™ 48

102. Slide 102: Investment Thesis – Shareholder Value Creation

     Avnet Analyst Day – December 14, 2004 Investment Thesis – Shareholder Value Creation ƒ Technology supply chain secular growth (8 – 12% growth rate) ƒ Global leader in technology distribution – scale and scope advantages ƒ Extensive supplier/customer relationships – Avnet’s intellectual capital ƒ Str

103. Slide 103: Break for Lunch

     Avnet Analyst Day – December 14, 2004 Break for Lunch Provided in the Luncheon Club Q4’03 Enabling Success from the Center of Town Hall Technology™ 50

104. Slide 104: Welcome to Analyst Day 2004

     Avnet Analyst Day – December 14, 2004 Welcome to Analyst Day 2004 December 14, 2004 Avnet – Enabling Success from the Center of Technology Q4’03 Enabling Success from the Center of Town Hall Technology™ 51

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