Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Q3 2021 Earnings Presentation
25 slides from Insight Enterprises's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Third Quarter 2021 Earnings Conference Call and Webcast Exhibit 99.2
Slide 2: Third Quarter 2021 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Third Quarter 2021 Earnings Conference Call and Webcast
Slide 3: Agenda
Agenda Disclosures CEO Commentary Commitment to Long-Term Priorities Third Quarter 2021 Highlights Cloud Migration – Shift to Digital Headquarters Diverse Solutions Offerings Business and Leadership Recognitions CFO Commentary Third Quarter 2021 Financial Highlights by Region Cashflow and Debt Coven
Slide 4: Disclosures: Safe harbor statement
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 CO
Slide 5: 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 in end markets Continue to optimize client experience
Slide 6: Third Quarter 2021 Highlights and Expectations
Third Quarter 2021 Highlights and Expectations Top line growth driven by hardware net sales which were up 36% compared to prior year Gross margin 14.9% GAAP EFO up 35% from last year Adjusted EFO* up 30% from last year Adjusted return on invested capital* 14.4%, up from 11.9% last year Hardware book
Slide 7: Cloud Migration Enables Shift to Digital Headquarters
Cloud Migration Enables Shift to Digital Headquarters Client wanted to eliminate brick-and-mortar headquarters and transition all headquartered employees to 100% remote work Transition on-premises data centers to the cloud Greater flexibility Better redundancy and resiliency Improved operations and
Slide 8: Connectivity: Changing How Clients do Business
Connectivity: Changing How Clients do Business Wireless connectivity becoming increasingly critical part of everyday life Strategic partnerships create full suite of integrated network and security solutions Insight and Cradlepoint partnership represents Insight’s commitment to offering innovative s
Slide 9: Outlook and Long-Term Commitments
Outlook and Long-Term Commitments Remain optimistic about prospects for the supply chain and market recovery continuing to strengthen into 2022 Increased outlook for 2021 Continued progress toward long-term goals highlighted at 2019 Investor Day Deliver on 5-year key initiatives* Grow sales faster t
Slide 10: CFO Commentary
CFO Commentary Third Quarter 2021 Financial Highlights by Region Cashflow and Debt Covenants 2021 Outlook
Slide 11: Third Quarter 2021 Highlights
Third Quarter 2021 Highlights Net Sales of $2.4 billion Gross margin 14.9% SG&A up 13.8% in US dollars, up 12.6% year over year in constant currency 11.4% - GAAP SG&A as a percent of net sales 11.1% - Adjusted SG&A as a percent of net sales* GAAP EFO of $83 million Adjusted EFO* of $94 million GAAP
Slide 12: Q3 2021 Year over Year Results
Net Sales Net Sales Gross Profit Gross Margin +26% YoY +25% YoY +19% YoY -100 bps YoY SG&A % of Net Sales Adjusted SG&A % of Net Sales* Adj EFO* Adj Diluted EPS* -130 bps YoY -110 bps YoY +30% YoY +36% YoY $2.45B 2020 2021 $0.36B 2020 2021 $94M 2020 2021 11.4% 2020 2021 14.9% 2020 2021 $1.87 2020 20
Slide 13: Q3 21 North America Financial Results
* See Appendix for reconciliation of non-GAAP measures Q3 2021 North America | Financial Results GAAP Earnings from operations $74M
Slide 14: Q3 2021 EMEA Financial Results
* See Appendix for reconciliation of non-GAAP measures ** Reference “Constant currency” section on slide 3 of this presentation Q3 2021 EMEA | Financial Results GAAP Earnings from Operations $5M (in constant $**) (in constant $**) (in constant $**)
Slide 15: Q3 2021 APAC Financial Results
* See Appendix for reconciliation of non-GAAP measures ** Reference “Constant currency” section on slide 3 of this presentation Q3 2021 APAC | Financial Results (in constant $**) (in constant $**) GAAP Earnings from Operations $4M (in constant $**)
Slide 16: Q3 2021 Cash Flows and Cash Cycle
Net cash from operations Cash Conversion Cycle +11 days YoY Days sales outstanding Days inventory outstanding Days purchases outstanding -4 days YoY +0 days YoY -15 days YoY $ - 118M 2020 2021 36 2020 2021 104 2020 2021 10 2020 2021 78 2020 2021 Q3 2021 | Cash Flows and Cash Cycle * See Appendix for
Slide 17: Liquidity and Debt Covenants
Liquidity and Debt Covenants ** Tax Expense plus Interest Expense less non-cash imputed interest under the Inventory Financing Facility and the Company’s Convertible Notes as discussed in Management’s Discussion and Analysis – Interest Expense, Net * “Other” includes (i) severance and restructuring
Slide 18: Full Year 2021 Outlook
Full Year 2021 Outlook Adjusted diluted earnings per share* is expected to be between $7.00 and $7.10 per share for the full year 2021 2021 net sales expected to grow low double digits over prior year Assumptions: Interest expense between $25 and $28 million Adjusted SG&A as a percent of net sales w
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Slide 20: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* * Adjusted consolidated earnings from operations, Adjusted consolidated net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain acquisition and integration related expenses,
Slide 21: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) * Adjusted consolidated earnings from operations, Adjusted consolidated net earnings and Adjusted diluted earnings per share exclude (i) severance and restructuring expenses, (ii) certain acquisition and integration relate
Slide 22: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) * The adjusted non-GAAP consolidated EFO amount used for the Adjusted non-GAAP ROIC calculation does not exclude amortization of intangible assets. This calculation remains consistent with the metric utilized in management’
Slide 23: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Slide 24: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes * NSIT assumed stock price for 20 out of last 30 trading days in the period ** The Balance Sheet impacts only apply post adoption of ASU 2020-06 on January 1, 2022. Diluted Earnings Per Share (DEPS) incremental number of shares* for various NSIT stock price exampl
Slide 25: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes * No automatic redemption trigger, expect convertible notes will remain outstanding for foreseeable future. GAAP diluted earnings per share (DEPS) are for reporting purposes only, no incremental shares were actually issued. ** Principal amount would be settled in