Avnet CEO Tells Wall Street "Our Stock Price Will Start Soar"
Bill Amelio says the giant electronic components supplier is on a roll with strong sales and earnings.
[MUSIC PLAYING] Bill, let's start by talking about what is Avnet. It's not a household name, even though it's been in business for 100 years. And it's a huge technology company listed on the Fortune 500. So give us a quick description about what does Avnet do. I want you to think about your favorite product for a second. That product started with a sketch on the back of a napkin. So we help customers take that sketch and make it into reality by getting the right components and the right electronics and the right technology into place, and we help them ramp that into production. And it becomes something that you use each and every day. You've been reinventing Avnet ever since you became CEO two years ago. What change did you see going on in the tech world that you said we've got to change this company and take it in a completely new direction? Well, we saw that we weren't participating early enough in the cycle with customers. That means at the time that the sketch is being designed. We had to get there earlier in order to be able to capture the hearts and minds of customers really early in the product lifecycle. Because we do that. That customer becomes a customer for life. We found that is a very powerful way to have a business model. Everyone's talking about the internet of things and how this is reshaping not only what's going on in the tech world, but also what's going to happen in our world. What's Avnet's role in these new technologies? Some estimates say that there'll be 50 billion connected devices by 2020. Can you imagine that? 50 billion devices. And we're right in the middle of all that. So how do we make it all work? Well, not only do we provide the devices, we work with customers to develop the entire solution, which includes the gateway, the network, the cloud, the analytics, and the data. And then we help them put that whole end to end strategy together. Pretty complex. And what happens at Avnet, we demystify that for our customers. And actually, you talk a lot about the importance of ecosystems in today's business environment. Why is this so important? Well, the idea is this, is we want to get working with customers early in our lifecycle. So we don't want to wait until the time frame during the production. We want to catch them in pre-production and in the design phase and then help shepherd them through the entire process. So what is Avnet's role in the ecosystem? Well, we start right at the beginning. From design, so we have great engineers that can help you think through the ideas that you have and make sure that we select the right products for you that's going to be in a cost optimized lead time and optimized way. Then we help you ramp up production. And we get you to the market effectively and efficiently. And we have tools that help you, in fact, design for manufacturing and make sure that you're designing at the lowest possible cost. You're here in New York to meet with Wall Street analysts and investors. And given that Avnet has gone through dramatic changes over the last few years, what's the key message that you want to get across to them? Key message is we're on track. We're making great progress. And we have a new-- there's a new Avnet. The new Avnet is one where we're mainly just entire lifecycle of products, from the time we design to the time we develop to the time we bring it to market in prototypes and to the time we do mass scale production. Well, you know that Wall Street is all about stock prices. And looking at Avnet stock, it's pretty much trading at the same price level it was two years ago when you became CEO. So what do you have to do to get that stock moving higher and to get investors to believe in your plan? The great news is this. We've now had four quarters in a row where we either beat or met our commitments. All we need is a couple more quarters of that and then them to understand the strategy that we've put in place and say, look, these guys got credibility. Couple more quarters, we believe them. And the friction will go away, and you'll see our stock price start to soar.