Summary:
 general review
i am pleased to report that during 2007 the abacus group
grew its sales 12 and its operating profit before amortisation
and exceptionals by 13 59 higher after amortisation 
and exceptionals when compared to 2006 the integration 
of our acquisitions made in 2006 was completed ahead 
of our original schedule and this was a significant contributor
to the result
however although the year started as detailed in our 2006
review with a positive book to bill and billings in line with
management expectations as reported on 31 january 2007 
at our agm this trend changed quickly as often happens in
the electronic component industry the uk and italy were the
first countries to see this change and although group billings
for the first half remained in line with our expectations the
bookings did not a fact we brought to the market’s attention
with our statement of 30 march 2007
this lower booking trend continued as we moved into the
second half of 2007 and when we released our results on 
30 may 2007 we made it clear that we did not expect to
achieve the previously anticipated growth in the second half
we are of the opinion that the component distribution industry
is an early barometer on the state of electronic manufacturing
output a belief that is being confirmed by data recently
released by a number of european governments
all figures refer to sales comparisons and assume a full
12 months in 2006 financial year for axess and deltro
uk  ireland
it was a difficult year for our businesses in this region as it 
was the first to show signs of a slowdown however the
market share gain for our electronic component distribution
companies made in the first half was maintained throughout
the year plus we saw an increase in the number of
electromechanical products shipped to our customers
preliminary reports by the uk industry association afdec
show that the decline in electromechanical sales in 2007 
over 2006 was less than 1 compared to 9 for both
semiconductor and passive products supporting our
acquisition strategy of buying deltron whose product 
portfolio was 100 electromechanical
chief executive’s review 
“
during fy07 we have built within the abacus group a very solid platform that has enabled us to
maintain our gross margin at a level much above that of our major competitors has minimised the 
risks on the loss of a customer or supplier has enabled us to be profitable in a difficult market and
reduce our debt levels we are also able to continue to invest in new franchises that bring new 
products with growth potential to the group
”
6 abacus group plc
75875 pre  181207  2107  page 6
review by region
n our manufacturing business alpha 3 saw sales growth 
of 5 in fy07 a pleasing result that was driven by 
a large number of its customers continuing to seek a local
manufacturer who can offer a very flexible service for fairly
complex products something that is difficult to obtain from
offshore manufacturing
towards the end of the year the reporting structure of our
specialist distribution businesses trident and tdc was
changed so that both now report to the same senior 
manager we are confident that this closer cooperation 
will create more opportunities for these growth products 
as we move forward
france
we acquired the axess group axess and rdi in april 2006
because we believed their product portfolio and strategy
would create growth opportunities and this was 
demonstrated to be true in fy07 where we achieved 
growth in excess of 6 despite the french industry
association spdei forecasting an overall market decline 
of 12 this result has clearly strengthened our market
position and with abacus deltron and abacus rdi now 
having an integrated sales and marketing team combined 
with a number of new franchise opportunities we are in a
position where despite a difficult market we could continue 
to gain market share
nordic
in our fy06 report we stated that in denmark we were
keeping the acquired deltron business conelec separate
from abacus denmark as it was selling customer specific
assemblies rather than single components this was a
successful strategy conelec grew in excess of 7
contributing to an overall growth in the region of just under
7 however we are now finding that many of conelec’s
customers and abacus denmark’s customers are seeking 
to buy from just one rather than both of our companies 
and as we move into fy08 we have combined the two as
abacus conelec under the management of the conelec
general manager and believe this will create further synergistic
sales opportunities
our investment in trident personnel in this region including
finland is starting to generate the anticipated returns and this
business saw growth of 30 in sales revenue in fy07 and has
a number of clearly identified design wins that should enable
growth to continue as we move forward
germany
our investment in new people and new offices did not
generate growth as quickly as we had expected and
combined with the loss of a major customer to direct supply
from the component manufacturer and a slow down in the
market in the second half of the year led to an overall decline
in sales of 55
however we now have all the regional sales offices well
established have relocated to improved premises in munich
and are achieving a number of new franchise opportunities 
in both standard components and specialist distribution
products all of which gives us confidence for achieving 
growth in fy08
7 annual report  accounts 2007
75875 pre  181207  2107  page 7 italy
the italian market has been very similar to the uk in that 
the slowdown started towards the end of our first half 
their industry association assodel is forecasting a decline
of 5 in 2007 and this combined with the loss of some
business to offshore manufacturing led to an overall decline
for abacus ecc of 65
however the decline was mainly in the standard component
area and we achieved good growth with products such as
microsoft embedded operating software and a range of
displays which leads us to believe that as we move into 
fy08 we will be able to reverse the decline despite continued
market weakness
austria and benelux
these two countries are much smaller markets than those
detailed above but nonetheless are important with a good
base of customers in both our investment in new personnel
in austria has led to a growth of 47 albeit from a small
base and in benelux our integration of abacus deltron and
trident has created savings that have improved the profit
before tax as we move forward we believe further sales
growth is achievable in both through a combination of 
better performance on existing products and a number 
of new franchise awards
asia
through our office in hong kong we now manage six people
in the region whose roles are a combination of supporting
business that is transferred from europe – in excess of 
£5 million was shipped into asia but invoiced within europe
and liaising with the key suppliers to the group which are
asian based – greater than 15 of purchases come from 
the region
we also offer from this office engineering support for added
value products and anticipate that this will be an increasing
part of their job function as we develop our specialist
distribution strategy in all european countries
outlook
during fy07 we have built within the abacus group a very
solid platform that has enabled us to maintain our gross
margin at a level much above that of our major competitors
has minimised the risks on the loss of a customer or supplier
has enabled us to be profitable in a difficult market and 
reduce our debt levels we are also able to continue to 
invest in new franchises that bring new products with growth
potential to the group
abacus group plc
chief executive’s review continued
8
75875 pre  181207  2107  page 8 these statements are supported by an analysis of our product
split our customers and our suppliers as detailed to the right
with regard to the market history shows that the cycles 
are now much shorter and shallower with growth in 2004
decline in 2005 growth again in 2006 only to decline in 2007
however during these years the percentage share of the 
total market taken by distribution has increased every year
according to data from afdec and europartners with the 
uk now being at 30 from 25 in 2004 and europe being 
at 27 from 24
abacus group now has a very solid foundation and is in an
ideal position to take advantage of both market improvement
and when the timing is right consolidation within the industry
m kent
chief executive officer
27 november 2007
9 annual report  accounts 2007
specialist distribution 21
manufacturing 6
electromechanical 35
semiconductors 25
passives 13
largest 
t op 10 10
other 88
largest 3
t op 10 22
other 75
product split
suppliers
customers
75875 pre  181207  2107  page 9
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