Slide 1: Avnet Third Quarter 2023 Financial Results
Avnet Third Quarter 2023 Financial Results May 3, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the financial condition, results of operations and business of the
Slide 3: Executive Overview
Executive Overview Phil Gallagher Chief Executive Officer 3
Slide 4: Q3 FY23 Overview
Q3 FY23 Overview Revenue • Exceeded high end of sales and adjusted EPS guidance despite headwinds • Sales growth led by EMEA and the Americas $6.5B Revenue +3% Y/Y in constant currency Operating Income • Fifth consecutive quarter of operating margin greater than 4% • Adjusted operating income grew m
Slide 5: Market Environment
Market Environment Avnet’s role as a distributor remains critical Regional demand • Strength in Americas and EMEA; Asia slowed End market demand • Strength: industrial, transportation and defense/aerospace Lead times • Improving, but certain products remain extended Book-to-bill • Remained below par
Slide 6: Electronic Components (EC)
Electronic Components (EC) • Growth in western regions – Americas operating income highest in several years – Asia maintained margin $6.1B – Record EMEA revenue and operating income Revenue +4% Y/Y in constant currency • Record demand creation revenue and gross profit – Supported by talented enginee
Slide 7: Farnell
Farnell • Sales and profitability impacted by supply constraints and pricing – Operating margin held steady sequentially – Premium pricing unwinding as expected $455M • Investments in Farnell’s eCommerce platform yielding results Revenue +1% Y/Y – 56% of Farnell sales and 74% of Farnell orders in co
Slide 8: Well-Positioned for Challenging Markets
Well-Positioned for Challenging Markets Closely monitoring developments • Lead times • Inventory levels • Mixed market conditions • Order cancellations Diverse, longstanding supplier and customer partnerships Value proposition more relevant than ever Focused on high growth verticals No supplier or c
Slide 9: Financial Highlights
Financial Highlights Ken Jacobson Chief Financial Officer 9
Slide 10: Revenue
Revenue $6.75B $6.72B $6.51B +3.4% Regions $6.49B $6.37B in constant currency • EMEA record $2.4B sales • Y/Y in constant currency: EMEA +15%, Americas +5%, Asia -8% Electronic Components • Y/Y +1%, +4% in constant currency • Q/Q -6% in constant currency Farnell • Y/Y -3%, +1% in constant currency Q
Slide 11: Q3 Income Statement
Q3 Income Statement Improving operational efficiency Adjusted Operating Expense $6.5B Reported revenues as % of Gross Profit (1) 62.6% -138 bps 61.3% Gross margin flat Y/Y and up 79 bps Q/Q – higher margins in all 12.5% regions and seasonal shift to western regions $497M Adjusted operating expenses
Slide 12: Q3 Adjusted Operating Income
Q3 Adjusted Operating Income (1) Operating income grew 2.3x revenues Y/Y in constant currency 4.7% 4.8% +15 bps Electronic Components 4.5% 4.5% 4.4% • $305M up 15% Y/Y $304M $301M $315M +4% • 5.0% margin $288M $293M – +64 bps Y/Y and +34 bps Q/Q • All regions were up Y/Y, led by the Americas Farnell
Slide 13: Q3 Non-operating & EPS
Q3 Non-operating & EPS (1) Interest expense up $46M Y/Y and $13M Q/Q due to higher debt Adjusted Diluted EPS (1) $72M and borrowing rates – $0.37 Y/Y negative impact on adjusted diluted EPS $2.15 -7.0% $2.00 24.5% Adjusted effective tax rate (1) $2.00 Adjusted diluted EPS (1) – down 7% Y/Y and flat
Slide 14: Q3 Balance Sheet & Liquidity
Q3 Balance Sheet & Liquidity Inventory – a $381M increase Q/Q, driven by customer $5.4B rescheduling, investments in Farnell and FX Diluted Shares Outstanding 99M -7.1% 96 WC days 92M 2.3x Gross debt leverage $750M Available committed lines of credit $18M Cash flow from operations $0.29 Dividend – r
Slide 15: Outlook for Q4 FY 2023
Outlook for Q4 FY 2023 (ending July 1, 2023) Metric Guidance Range Midpoint Sales $6.10B – $6.40B $6.25B Adjusted Diluted EPS (1) $1.60 – $1.70 $1.65 Factors impacting our Q4 FY 2023 outlook • Based on current market conditions • Implies sequential sales decline of ~4%, below traditional seasonality
Slide 16: Q&A Session
Q&A Session 16
Slide 17: For more information, please visit https://ir.avnet.com/
For more information, please visit https://ir.avnet.com/ 17
Slide 18: Non-GAAP Definitions
Non-GAAP Definitions In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted ope