Geographic & Regional Profitability Analysis

Global Contribution Margin
36.2%
+2.1pp YoY
Worst Region Margin
8.1%
APAC Distributor
Avg Freight per Order
$14.80
+8% Q/Q
FX Impact (bps)
-42
Q4 reported margin

Regional Contribution Margin Overview

Region Revenue ($M) Variable Cost Logistics SG&A Contribution Margin % Trend
North America $142.5 $78.2 $8.9 $12.1 $43.3 30.4%
EMEA $118.3 $64.1 $11.2 $14.8 $28.2 23.8%
LATAM $67.8 $39.2 $6.1 $8.9 $13.6 20.1%
APAC Distributor $89.4 $52.1 $19.7 $10.4 $7.2 8.1%
APAC Direct $54.2 $28.9 $7.8 $6.2 $11.3 20.8%
Middle East $41.6 $22.8 $5.2 $5.1 $8.5 20.4%
Africa $28.9 $16.4 $4.1 $3.8 $4.6 15.9%
Total / Weighted Avg $542.7 $301.7 $63.0 $61.3 $116.7 21.5% —

Logistics & Freight Cost per Order by Zone

Price Realization vs Global List by Region

FX Impact on Reported Margin (bps) — Quarterly Trend

Regional SG&A Ratio Comparison (%)

Market Profitability Index

North America92
EMEA78
APAC Direct64
LATAM58
Middle East51
Africa38
APAC Distributor12
Index = Margin × Growth Score (0–100)

Regional Discount Rate Heatmap

Q1
Q2
Q3
Q4
NA
8.2%
9.1%
8.8%
8.4%
EMEA
12.1%
10.5%
9.8%
9.2%
APAC-D
18.4%
16.9%
16.2%
15.8%
LATAM
14.2%
13.8%
13.1%
12.6%

Regional Margin Forecast vs Plan

North America
30.4%
+0.8pp vs Plan
EMEA
23.8%
+1.2pp vs Plan
LATAM
20.1%
-0.3pp vs Plan
APAC Direct
20.8%
+0.5pp vs Plan
APAC Distributor
8.1%
-3.9pp vs Plan

Cross-Region Subsidy Alert

APAC Distributor model requires $12.1M annual subsidy from NA & EMEA margins to remain operational at current pricing.

Subsidy Source: North America $7.4M
Subsidy Source: EMEA $4.7M
Quarters Below 10% Margin 3 consecutive

Strategic Options: APAC Distributor Region

Option A: Price Increase
+12% list price to offset freight. Risk: 18% volume loss (elastic market).
Target margin: 14.2% | Est. timeline: 6 mo
Option B: Direct Fulfillment Shift
Transition 60% volume to APAC Direct model. Reduces freight $8/order.
Target margin: 18.5% | Est. timeline: 12 mo
Option C: Market Exit
Discontinue distributor partnership. Redirect capacity to APAC Direct expansion.
One-time cost: $2.8M | Margin relief: immediate
FX Rate Source & Methodology
• Rates: Bloomberg mid-market spot, daily close
• Hedge impact: included in reported margin adjustment
• Translation method: average rate for P&L, spot for balance sheet
Regional Close Calendar
• NA/LATAM: Month +3 business days
• EMEA: Month +5 business days
• APAC/ME/Africa: Month +7 business days (local GAAP reconciliation)