While Dutch ICT distributors are becoming larger, many smaller companies are changing their business model to have a more service-oriented approach.
- The Dutch ICT industry accounts for about 4.5% of GDP with approximately 365.000 employees active in the sector. About 95% of ICT businesses have less than 10 employees, and there are only 200 companies with a size of over 100 employees.
- In line with the robust economic performance, ICT turnover grew 5.7% in 2017 and is expected to increase 6% in 2018 and 5% in 2019. Competition in the market is high, and there have been a couple of large takeovers and mergers and acquisitions in 2017 and early 2018. While ICT distributors are becoming larger, many smaller companies are changing their business model to have a more service-oriented approach.
- In 2017 debt ratios have increased within the sector, and it is expected that this trend will continue over the next 2-3 years. Currently banks are generally willing to lend to the industry.
- On average, payments in the ICT industry take between 30 and 60 days. The number of payments delays and insolvencies is low and expected to remain stable in 2018.
- Due to the solid performance and benign credit risk situation, our underwriting stance for this industry remains generally open. However, given the highly competitive environment and the fact that many ICT businesses have low margins, the requirements for financial information on ICT buyers are very high.
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Market Monitor ICT June 2018
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