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© begemot 30 dreamstime.com Business | February 24, 2020

Significant decline in sales in the German component distribution

German component distribution shrinks by 20% in the fourth quarter of 2019, says the FBDi e.V.

In the fourth quarter of 2019, the German distribution of electronic components has experienced the sharpest decline in orders and sales for years, reflecting the economic situation in the market as a whole. Sales of the distribution companies organised in the Fachverband Bauelemente-Distribution (FBDi e.V.) fell by 20% to EUR 696 million. Orders decreased by 25% to EUR 651 million. The book-to-bill rate improved slightly to 0.93. The product segments developed almost in unison. Semiconductor sales shrank by 20.8% to EUR 495 million, passive components declined by 20% to EUR 84 million, and electromechanics slipped by 17.7% to EUR 74 million. Power supplies fell by 16.3%, displays by 16.6%, sensors by 14.5%, and assemblies and systems by 9.8%. The market distribution remained almost the same: semiconductors 71%, passives 12%, electromechanics 11%, with the remainder coming to 6%. The situation looked relatively moderate for 2019 as a whole: Total distribution sales fell "only" by 7.2% (to EUR 3.34 billion), while orders fell by 25% to just under EUR 3 billion. "What is surprising in the fourth quarter is not the decline itself, but the rather high -20%. It may be reassuring that the year as a whole remained within expectations - or even slightly above them, but this did not exactly create positive dynamics for the outlook of 2020. What makes it even more difficult is the outbreak of the corona virus in China and the potential impact on the supply chain. Selective shortages of electronic products and raw materials cannot be ruled out," says FBDi executive chairman Georg Steinberger. The restart of production in China will certainly have a major impact on further development, which Steinberger believes will continue to shift towards March in various product segments: "The health and safety of people in China and elsewhere is an absolute priority, so it's important to provide the greatest possible support for those affected. As far as the supply chain is concerned, our recommendation would be to talk, plan and not panic." According to Steinberger, there is not much new to report on the economic climate in Germany: "Although the PMI (Production & Manufacturing Index of IHS Markit) improved from its historic low of 41.7 points to 45.3 in January, it is still far from an optimistic outlook and is well below the European average. Germany is the pessimism world champion." As far as the components industry and distribution are concerned, the FBDi still expects a positive 2020 and a further upswing in 2021: "We believe that the innovative power of the industry can help to overcome the current social paralysis. The necessary course-setting, whether for the climate or for the modernization/digitization of society, is becoming more urgent than ever, otherwise we will not only miss our self-imposed targets, but also fail to achieve our technological leadership".
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