Slide 1: Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast Insight Presentation Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 1
Slide 2: Agenda
Agenda • Opening Comments • CEO Commentary • Fourth Quarter 2019 Consolidated Financials • Full Year 2019 Consolidated Financials • 2019 Highlights • 2020 Priorities • CFO Commentary • Financial results by region • Taxes and cash flow • Closing Comments & 2020 Guidance Insight Proprietary & Confiden
Slide 3: Disclosures
Disclosures • Safe harbor statement This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 related to Insight’s plans and expectations. Statements that are not historical facts, including the Company’s expected 2020 financia
Slide 4: Q4 2019 Year over Year Results
Q4 2019 Year over Year Results Net Sales Gross Profit Gross Margin +31% YoY +33% YoY +20 bps YoY $2.30B $338M 14.7% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Adj Diluted EPS* +50 bps YoY +29% YoY +11% YoY 11.6% $82M $1.57 2018 2019 2018 2019 2018 2019 GAAP Earnings from operations $
Slide 5: FY 2019 Year over Year Results
FY 2019 Year over Year Results Net Sales Gross Profit Gross Margin +9% YoY +15% YoY +70 bps YoY $1.14B $7.73B 14.7% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Adj Diluted EPS* +80 bps YoY +11% YoY +9% YoY 11.0% $282M $5.42 2018 2019 2018 2019 2018 2019 GAAP Earnings from operations $
Slide 6: FY 2019 Highlights
FY 2019 Highlights • Strategic Investments • Acquisition of PCM • Teammate Development • Fortune’s 100 Best Workplaces for Diversity, ranked #70 • Fortune’s 50 Best Workplaces in Technology, ranked #23 • Capacity for growth – New debt facilities • Strong Financial Performance • High single-digit top
Slide 7: Our go-to market strategy
Our go-to market strategy Manage Today Transform Tomorrow Clients Suppliers Supply Connected Workforce Cloud + Data Center Digital Innovation Chain Optimization Transformation Product- Outcome- focused based CapEx OpEx Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Dir
Slide 8: CFO Commentary
CFO Commentary • Financial results by region • Taxes and cash flow Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 8
Slide 9: Q4 North America Financial Results
Q4 North America | Financial Results Net Sales Gross Profit Gross Margin +38% YoY +44% YoY +70 bps YoY $1.86B $271M 14.6% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix +80 bps YoY +40% YoY 13% 11.4% $69M Hardware 20% Software 67% Services 2018 2019 2018 2019 GAAP Earnings from
Slide 10: FY 2019 North America Financial Results
FY 2019 North America | Financial Results Net Sales Gross Profit Gross Margin +12% YoY +19% YoY +80 bps YoY $871M $6.02B 14.5% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix +80 bps YoY +14% YoY 13% $230M Hardware 11.0% 21% Software 66% Services 2018 2019 2018 2019 GAAP Earning
Slide 11: Q4 EMEA Financial Results
Q4 EMEA | Financial Results Net Sales Gross Profit Gross Margin +11% YoY in constant $** +4% YoY in constant $** -90 bps YoY $58M $402M 14.4% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix -30 bps YoY -39% YoYin constant $** 9% Hardware 43% Software 11.9% $11M 48% Services 2018
Slide 12: FY 2019 EMEA Financial Results
FY 2019 EMEA | Financial Results Net Sales Gross Profit Gross Margin +5% YoY in constant $** +8% YoY in constant $** +30 bps YoY $1.53B $227M 14.9% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix +30 bps YoY +8% YoY in constant $** 10% $41M 12.2% Hardware 41% Software 49% Servic
Slide 13: Q4 APAC Financial Results
Q4 APAC | Financial Results Net Sales Gross Profit Gross Margin -2% YoY in constant $** -7% YoY in constant $** -140 bps YoY $34M 27.4% $9M 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix +170 bps YoY -3% YoY in constant $** 21.7% 27% Hardware 36% Software $2M Services 37% 2018
Slide 14: FY 2019 APAC Financial Results
FY 2019 APAC | Financial Results Net Sales Gross Profit Gross Margin +2% YoY in constant $** +6% YoY in constant $** +90 bps YoY $180M $40M 22.1% 2018 2019 2018 2019 2018 2019 SG&A % of Net Sales Adj EFO* Sales Mix +80 bps YoY +2% YoY in constant $** 19% 16.3% $11M Hardware 29% Software Services 52%
Slide 15: Cash Flows and Cash Cycle
Cash Flows and Cash Cycle Net cash from operations Cash Conversion Cycle +5 days YoY 38 $128M 2018 2019 2018 2019 Days sales outstanding Days inventory outstanding Days purchases outstanding -2 days YoY 0 days YoY -7 days YoY 100 72 10 2018 2019 2018 2019 2018 2019 * Adjusted Non-GAAP excludes sever
Slide 16: Closing Comments
Closing Comments • 2020 net sales expected to grow between 20% and 25% • Adjusted diluted earnings per share* are expected to be between $6.55 and $6.65 per share for the full year 2020 • Assumptions: • interest expense between $35 and $40 million. • an effective tax rate of 25% to 26% for the full
Slide 17: Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended Twelve Months Ended Dec 31, Dec 31, US Dollar in $000s, except per share data 2019 2018 2019 2018 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 67,016 $ 58,659 $ 240,594 $ 233,483 Severance
Slide 18: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Twelve Months Ended Dec 31, Dec 31, US Dollar in $000s 2019 2018 2019 2018 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 54,902 $ 44,444 $ 190,452 $ 185,705 Severa
Slide 19: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Dec 31, US Dollar in $000s 2019 2018 Return on invested capital: GAAP consolidated EFO $ 240,594 $ 233,483 Severance and restructuring expenses 5,425 3,424 Acquisition-related expenses 11,342 282 C onstr