Exclusive Networks has had a good third quarter and seen gross sales up nine per cent.
EMEA saw the biggest growth for the security outfit, reaching gross sales of €973million which is a 14 per cent increase.
The region benefitted from momentum resulting from the quality of vendor portfolio across all countries, Exclusive said.
Most of the reported growth (five per cent) was driven by business with existing vendors in their current geographies.
Exclusive Networks did rather well in the first half of 2023 with growth in most areas of the business and a “record high” gross sales clocked at £1.99 billion.
The outfit reported Year-on-year, gross sales grew by 20 per cent on a reported basis and 22 per cent at constant currency.
Most of this growth was driven by business with existing vendors in their current geographies.
The remainder of the growth was due to vendor expansion which was a combination of vendors entering into new geographies and new vendor relationships.
The distributor reported improvements in vendor retention rates in H1 2023, supported by increasing demand for vendors’ solutions and the continued engagement of channel partners.
Net vendor retention rate on a rolling 12-month basis at H1 2023 was up 131 per cent (vs 122 per cent in H1 2022) with net reseller retention rate on a rolling 12-month basis at H1 2023 at 130 per cent (vs 122 per cent in H1 2022).
Net margin was £191.63 million in the first half of 2023, an increase of 18 per cent year-on-year, reflecting a mix of geography and deal size.
Operating expenses increased 14 per cent to £119.12 million, aligned with tight control on new hires and overhead cost structure.
The company said costs are evolving at a slower pace than the top line, improving its operating leverage.
Adjusted EBIT rose to £72.51 million, up 26 per cent year-over-year.
In second quarter gross sales were £.99 billion, an increase of 12 per cent year-over-year on a reported basis, 15 per cent at constant currency.
Compared to Q1 2023, when gross sales clocked at £1.02bn, Exclusive Networks saw a slight dip in sales this quarter.
Exclusive Networks CEO Jesper Trolle said he was pleased with the excellent performance in the first half of 2023, with strong margin progression and sales growth ahead of the cybersecurity market.
“Our momentum reflects the differentiation, resilience, and operational gearing of our model, combined with a laser focus on efficiency and cost control. As a result, we have moved closer to our long-term target of adjusted EBIT margins of c.40% with high cash generation. In addition, we continue to grow strongly in the US, a significant market with exciting long-term growth potential.”
Trolle acknowledged how after a surge in demand for cyber technology in 2022 – reflecting the shift to hybrid working, increasing use of cloud technology and threats linked to the war in Ukraine – the company is now seeing sales activity return to a “normalised” long-term trend of double-digit growth.
Ignition Technology is keeping its identity after being swallowed by Exclusive Networks.
Ignition Technology’s Sean Remnant said Exclusive took a different approach during the take over.
He said that while the competition like to think that when a large distributor swallows you, they can take your portfolio when you disappear.
“That is probably the case in some acquisitions, but that hasn’t been the case here. This is 100% not the case. So we’ve still got separate profit and loss, separate management team. The culture is the same as it was, and we’re trying to build that Ignition entity and take it to EMEA and then take it worldwide.”
A year after its IPO, Exclusive Networks saw its third quarter gross sales up by 42 percent to €1,127 million.
The company’s Americas Region grew by 66 percent, overtaking APAC for the first time and its cloud-based sales reached €1 billion annualised run rate. Exclusive upgraded its outlook in September and it looks like its 2022 prediction will hold firm.
Jesper Trolle, Chief Executive Officer, said: “A year on from our successful IPO, I am delighted to report another very solid quarterly performance. Our strong momentum since becoming a public company continues, with Q3 Gross Sales growing by 42 percent compared to the same period last year.
“This is down to the hard work and commitment of our talented teams around the globe who continue to leverage our unique position and influence within the cyber ecosystem to capitalise on strong cybersecurity market demand.”
Distie Exclusive Networks had a rather good second-quarter.
The channel outfit saw a 43 percent increase in gross sales, reaching more than €1 billion, with growth in major regions, including 43 percent in Europe, the Middle East and Africa (EMEA), 36 percent in Asia-Pacific (APAC) and 46 percent over the pond.
The UK and Germany coined it in as the enterprise market accelerated during the quarter.
There were signs that the momentum would continue with bookings growth above gross sales growth, and as a result of extending vendor relationships and acquisitions the serviceable addressable market had grew to more than €2 billion.
Exclusive Networks has shared its first set of full-year numbers since going public, with the distributor delivering against the strategy it set out to investors in its IPO.
For the year ended December 2021, the channel player produced a 15.1 percent year-on-year improvement in gross sales, coming in at €3.3 billion. Adjusted net income of €72.6 million represented an 85.1 percent increase.
The distributor also saw its channel base widen, signing up more than 1,250 new resellers (seven percent growth), servicing 110,000 end-customers, up 4,000, as well as expanding with vendors into 21 fresh countries. The firm added 22 vendors to its roster, including Diamanti, Hashicorp, Salt Security and Sonatype.
The year saw the business use its financial muscle to acquire additional expertise, with buys of emerging vendor support specialist Ignition Technology and Networks Unlimited.
After a trial in Blighty, Exclusive Networks is extending its Ignition Technologies operation across Europe, the Middle East and Africa (EMEA).
Ignition offers cyber security technologies to the channel it was acquired by Exclusive last year and the decision to expand its coverage is also an opportunity for the firm to add more depth to its senior management team
Now the operation will cover EMEA, which includes decent-sized territories, including France and the Middle East, where Exclusive already has a strong foothold.
Exclusive Networks has talked about its first financial numbers since going public.
The distie revealed that in its third quarter, gross sales were up by 21.9 percent to €804.9 million with revenues of €578.4 million compared to the same period in 2020, accelerating the trend recorded in the first half of the year.
In the EMEA region, gross sales climbed by 22.3 percent to €608.3 million, compared to the same period last year and the firm reported positive growth in the enterprise sector. Elsewhere, it saw sales improve by 21.2 percent in APAC and 20.1 percent in the American region.
Jesper Trolle, CEO of Exclusive Networks, claimed the first results since the September IPO showed the business was taking the right approach.
Tanium has expanded its partnership with Exclusive Networks in the EMEA region. They make a perfect couple.
The move means that Exclusive Networks will give resellers the ability to address the challenges faced in the hybrid-working world, providing customers with real-time visibility and control across their endpoints – whatever endpoints means.
The increases in remote work adoption, distributed operations and multi-cloud deployments, combined with device proliferation has made managing and securing IT environments incredibly complex. To add to these challenges, mid-size businesses are at greater risk of ransomware and other malware threats than ever before, but are struggling with keeping on top of cyber hygiene basics that help to protect them.
Exclusive Networks has announced the addition of Sonatype to its EMEA vendor portfolio.
The leader in developer-friendly tools for software supply chain automation and security has chosen Exclusive to help expand its footprint with a partnership geared to equipping and enabling resellers, focused on bringing best-in-class digital and cloud-based security products and services to market.
As part of the agreement, Exclusive will focus primarily on opportunities around the Nexus Lifecycle and Nexus Firewall solutions that promise to eliminate risk from third-party open-source software supply chains.
Exclusive Networks VP Global Vendor Alliances and Business Development Denis Ferrand-Ajchenbaum said: “Enterprises investing in innovation and digital transformation are rightly concerned about the security risks inherent in third-party software components. So they’re turning to channel partners to advise on and implement specialised, automated solutions that won’t compromise development velocity or interrupt workflows.
Exclusive Networks has bought DevSecOps and containerisation outfit Nuaware.
Exclusive said the move adds immediate global scale and services capability to the Nuaware proposition and portfolio, while giving it a unique skill set for capitalising on immense demand shifts brought about by digital transformation.
Exclusive Networks CEO Jesper Trolle, said: “DevOps toolchains, containers and the emergence of DevSecOps are specialist areas where Nuaware has carved a truly unique niche in distribution. This acquisition puts us where we want to be in this space, giving our partners a readymade on-ramp into new high-growth opportunities. Large vendors being drawn to these markets are seeking turnkey channel solutions, and their established partner ecosystems have technical skills gaps that demand credible support. We can now meet these kinds of challenges far more effectively, while continuing to accelerate growth for the next waves of disruptive technologies in secure, trusted digital infrastructure.”
After a year away, Barrie Desmond has returned to Exclusive as part of a cunning plan to spruce up the channel player’s executive team.
Desmond will become SVP of marketing and communications, and Gaerard Allison takes up the SVP EMEA role. At the same time, the distributor has introduced Brad Gray as SVP of APAC and Scott Lewis as SVP of the Americas.
Desmond said that the channel player had lots to do to disrupt the market and introducing technologies that would put resellers in a position to meet evolving customer needs.
Exclusive Networks has entered the Israeli market by writing a cheque for SecureWave, an independent cybersecurity VAD based in Tel Aviv.
SecureWave distributes to around 250 resellers, SIs and service providers. Its major vendors are Fortinet, Nutanix and Infoblox, which Exclusive Group said are all “strategic to Exclusive’s cyber and cloud transformation portfolios”.
Its CEO Olivier Breittmayer said Exclusive Group’s partners would benefit immediately from the shared vendor investment the acquisition brings.
Exclusive has been appointed by JASK, the provider of the industry’s Autonomous Security Operations Center (ASOC) platform, to accelerate the market penetration of its disruptive and innovative technologies around the world.
Exclusive will manage the distribution of JASK’s ASOC Platform as part of a worldwide agreement, with the first wave of territories onboarding in Benelux, the Nordics and the USA, with more countries expected to be rolled out shortly. The distribution
Exclusive Group is completing a major investment transaction with funds advised by the private investment firm, Permira.
The amount of cash involved is not being talked about but it is clear that it is not being used for aquistions.
The company said its aim is not to dilute its distinctive, value-oriented approach by consolidating with other major VAD players, but to create the world’s largest global specialist VAD in cyber and cloud transformation, with a target to reach $10bn annual revenue in the years ahead.
Olivier Breittmayer, CEO at Exclusive Group, said: “Cybersecurity and cloud are the leading business priorities in this age of digital transformation, both as separate disciplines but – even more so – joined together as a co-dependent whole. Both sectors are becoming increasingly complex, and both suffer from a huge lack of skills & knowledge. The Industry needs a VAD that can fill this gap and we aim to do that. We believe we have the right and relevant focus; vendors, services and skill set to build a compelling offer for channel partners and vendors to realise significant profitable growth.”
By following a specialist focus in cyber and cloud, Exclusive Group claims to be addressing the widening global shortage in skills and knowledge among channel partners and end-user organisations to enable the desired pace and success of digital transformation.
“We have some of the best people in the world and by far the highest ratio of engineers of any distributor in our class”, added Breittmayer. “We also have the greatest track record of ensuring local, regional and global market success for disruptive technologies. Our strategy will see us continue to build out the strongest possible vendor portfolio in our ‘cyber super centres’ and ‘cloud competency centres’ – across all relevant segments – and expand our service offerings and global footprint to meet the demands of any project.”
Michail Zekkos, Partner in the technology team at Permira said: “Exclusive Group’s unrivalled focus and commitment to cyber and cloud is very exciting and we are delighted to partner with the company. We believe that enterprise cloud and cybersecurity will continue to rapidly converge, creating a tremendous market opportunity for the company to enable that transition while positioning its channel partners at its forefront.”
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