Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Q1 2021 Earnings Presentation
26 slides from Insight Enterprises's earnings presentation, May 6, 2021
Slide 1: Insight Enterprises, Inc. First Quarter 2021 Earnings Conference Call
Exhibit 99.2 Insight Enterprises, Inc. First Quarter 2021 Earnings Conference Call and Webcast 1 Insight Presentation Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved.
Slide 2: Agenda
Agenda • Disclosures • CEO Commentary • First Quarter 2021 Highlights • Solutions Focused • Commitment to Long-Term Priorities • Investing in Our Business • CFO Commentary • First Quarter 2021 Financial Highlights by Region • Cashflow and Debt Covenants • 2021 Outlook • Closing Comments Insight Prop
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 those related to Coronavirus strain
Slide 4: First Quarter 2021 Highlights and Expectations
First Quarter 2021 Highlights and Expectations • Clients continued to leverage cloud solutions • 21.3% - Cloud as a percent of total gross profit compared to 16.8% prior year • Hardware booking trends improved throughout the quarter • Elevated backlog heading into Q2 21 and pipeline for future sales
Slide 5: Solutions Focused
Solutions Focused Digital Innovation Cloud + Data Center Connected Workforce Transformation Supply Chain Optimization Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 5
Slide 6: Cloud + Data Center Transformation (CDCT)
Cloud + Data Center Transformation (CDCT) Credit union migrates data center to the cloud for instant benefits Cost-effective and Better Recovery Increased Point Objectives scalable disaster recovery in short- and (RPOs) and Microsoft® Azure® long-term ROI Recovery Time cloud Objectives (RTOs) Stream
Slide 7: Connected Workforce (CWF)
Connected Workforce (CWF) Professional services provider in government sector enhancing security solutions to meet new compliance requirements Client Challenge Insight Solution The professional services • Upgraded licensing from E3 to E5 organization needed help identifying • Provided Professional S
Slide 8: Commitment to Long-Term Priorities
Commitment to Long-Term Priorities • Continue to innovate to capture market share in high growth areas • Develop and deliver solutions that drive better business outcomes for clients • Expand and scale business with strategic clients and end markets • Continue to optimize client experience • Maintai
Slide 9: Investing in Our Business to Fuel Growth
Investing in Our Business to Fuel Growth • Invest in critical areas with a goal to deliver best in class client experience and optimize infrastructure to scale future growth • Invest in sales and technical talent • Enhance scalable IT systems and processes • Leverage ecommerce platforms to target mi
Slide 10: CFO Commentary
CFO Commentary • First Quarter 2021 Financial Highlights by Region • Cashflow and Debt Covenants • 2021 Outlook Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 10
Slide 11: First Quarter 2021 Highlights
First Quarter 2021 Highlights • Net Sales of $2.2 billion • Gross margin 15.1% • SG&A down 2% year over year in constant currency, up 1% in US dollars • 12.4% - GAAP SG&A as a percent of net sales • 12.0% - Adjusted SG&A as a percent of net sales* • GAAP EFO of $67 million • Adjusted EFO* of $68 mil
Slide 12: Q1 2021 Year over Year Results
Q1 2021 Year over Year Results Net Sales Gross Profit Gross Margin +2% YoY +2% YoY -10 bps YoY $2.19B $0.33B 15.1% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Adj Diluted EPS* -10 bps YoY +3% YoY 0% YoY 12.4% $68M $1.30 2020 2021 2020 2021 2020 2021 GAAP Earnings from operations $67M
Slide 13: Q1 2021 North America | Financial Results
Q1 2021 North America | Financial Results Net Sales Gross Profit Gross Margin -1% YoY -1% YoY 0 bps YoY $1.65B 15.3% $253.5M 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix -10 bps YoY -2% YoY 14% 12.5% Hardware $54M 19% Software 67% Services 2020 2021 2020 2021 GAAP Earnings fr
Slide 14: Q1 2021 EMEA | Financial Results
Q1 2021 EMEA | Financial Results Net Sales Gross Profit Gross Margin +5% YoY (in constant $**) +3% YoY (in constant $**) -20 bps YoY $0.48B $66M 13.8% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix -40 bps YoY +15% YoY (in constant $**) 10% $11M Hardware 41% Software 11.6% 49%
Slide 15: Q1 2021 APAC | Financial Results
Q1 2021 APAC | Financial Results Net Sales Gross Profit Gross Margin +2% YoY (in constant $**) +10% YoY (in constant $**) +110 bps YoY $59M $12M 20.1% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix +40 bps YoY +21% YoY (in constant $**) 16% 25% $3M Hardware 15.0% Software Servi
Slide 16: Q1 2021 | Cash Flows and Cash Cycle
Q1 2021 | Cash Flows and Cash Cycle Net cash from operations Cash Conversion Cycle -7 days YoY 31 $43M 2020 2021 2020 2021 Days sales outstanding Days inventory outstanding Days purchases outstanding +2 days YoY 0 days YoY +9 days YoY 11 106 86 2020 2021 2020 2021 2020 2021 Insight Proprietary & Con
Slide 17: Liquidity and Debt Covenants
Liquidity and Debt Covenants Fixed Charge Coverage Twelve Months Ended 400,000 Mar 31, 341,298 350,000 US Dollar in $000s 2021 2020 300,000 Adjusted Consolidated EBITDA: 250,000 Net Income $ 181,847 $ 154,041 200,000 Interest Expense 40,081 36,709 4.55x 150,000 Taxes 60,672 48,838 100,000 75,054 Dep
Slide 18: Full Year 2021 Outlook
Full Year 2021 Outlook • 2021 net sales expected to grow between 4% and 8% • Adjusted diluted earnings per share* is expected to be between $6.60 and $6.80 per share for the full year 2021 • Assumptions: • Interest expense between $25 and $28 million • Effective tax rate of 25% to 26% for the full y
Slide 19: Commitment to ESG
Commitment to ESG Insight’s values of Hunger, Heart, and Harmony are core to how our teammates treat one another, engage with those we work with every day, and improve the communities where we work and live. 2021 Corporate Citizenship Report Fortune Forbes 2021 2021 World’s Most Best Employers for A
Slide 20: Appendix
Appendix 20 Insight Presentation Insight Insight Proprietary Proprietary & & Confidential. Confidential. Do Do Not Not Copy Copy or or Distribute. Distribute. © © 2019 2019 Insight Insight Direct Direct USA, USA, Inc. Inc. All All Rights Rights Reserved. Reserved. 20
Slide 21: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Mar 31, US Dollar in $000s, except per share data 2021 2020 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 67,024 $ 52,863 Amortization of intangible assets 8,041 10,108 Other (6,740) 3,610
Slide 22: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Mar 31, US Dollar in $000s 2021 2020 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 53,921 $ 42,341 Amortization of intangible assets 7,417 9,493 Other* (7,238) 3,3
Slide 23: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Mar 31, US Dollar in $000s 2021 2020 Return on invested capital: GAAP consolidated EFO $ 285,736 $ 236,418 Other 2,928 21,508 Adjusted non-GAAP consolidated EFO* 288,664 257,926 Income tax expense** 75,0
Slide 24: Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Mar 31, US Dollar in $000s 2021 2020 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 271,190 $ 268,863 Less: Amorization of intangible assets (8,041)
Slide 25: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes Insight’s policy elected for settlement of the convertible notes is principal/par value in cash with the excess being settled in shares resulting in dilution in GAAP reported Diluted Earnings Per Share (“DEPS”). The DEPS incremental shares for GAAP reporting purpo
Slide 26: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes Insight Convertible Senior Notes - $350 Million Relevant NSIT stock prices: • Price at issuance - $51.56 • Conversion ratio price equivalent - $68.32 Triggered potential additional shares in GAAP DEPS* • Sales price conversion trigger - $88.82 • Bond hedge strike