Logitech International S.a. · SIX:LOGN
Logitech International — Q3 FY2017 Earnings Presentation
22 slides from Logitech International's earnings presentation, Jan 25, 2017
Slide 1: Logitech
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Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: market opportunities, spending levels, momentum, innovation, market reach, product experiences, long-term business
Slide 3: Key Messages – Q3 FY17
KEY MESSAGES – Q3 FY17 • Highest ever quarterly sales, with Q3 retail sales of $667M, up 13% • All regions and almost all categories contributed to the better-than- expected Q3 performance • Gross margin reached an all-time high of 37.4%, enabling us to re- invest in our capabilities to drive long-t
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Slide 5: Mobile Speaker Software Updates
MOBILE SPEAKER SOFTWARE UPDATES • Free over-the-air software update allowing UE BOOM 1, UE BOOM 2, and UE MEGABOOM to connect 150+ speakers together for an even greater social listening experience • Set the Guinness World Record for the “Most Bluetooth Speakers Playing from a Single Source” with 208
Slide 6: Alexa Integration with Harmony
ALEXA INTEGRATION WITH HARMONY • Combining Alexa with our Harmony Hub brings an innovative way to control your entertainment experience with voice • Through Harmony, Alexa can turn on/off and control your TV and AV system • “Alexa, turn on ESPN” • “Alexa, turn on Netflix” • “Alexa, tell Harmony to i
Slide 7: Jaybird X3 Launch
JAYBIRD X3 LAUNCH • Third-generation X-series wireless earbud is now even smaller with better sound, battery, and fit • Voice Prompts let you know when X3 is successfully paired and connected, or whether X3 is turned on or off • MySound App allows you to customize your sound settings, regardless of
Slide 8: New Security Features for Logitech Circle
NEW SECURITY FEATURES FOR LOGITECH CIRCLE • New Circle SafeTM Premium subscription brings several enhanced security features to Logitech Circle Home Security Camera via the companion app • Person Detection – The Circle cam can now recognize the difference between a person and a pet • Motion Zones –
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Slide 10: Q3 Results Set Numerous Records
Q3 RESULTS SET NUMEROUS RECORDS Q3'17 Q3'16 YoY • Retail sales +13% (CC) to record high of $667M, with organic growth +11% Retail 667 595 12% Net Sales 667 621 7% • Gross margin 37.4%, driven by continued Retail YoY% CC 13% 9% focus on cost control and increased scale YoY% 7% 3% YoY% CC 8% 8% • Oper
Slide 11: Almost All Product Categories Growing
ALMOST ALL PRODUCT CATEGORIES GROWING Q3'17 Q3'16 YoY YoY CC • PC Peripherals maintained steady growth Pointing Devices 142 140 2% 2% • Video Collaboration’s strong momentum Creativity & Prodctivity continued Keyboards & Combos 125 117 8% 9% PC Webcams 31 30 3% 4% • Mobile Speakers continued to outp
Slide 12: All Three Regions Driving Sustainable Growth
ALL THREE REGIONS DRIVING SUSTAINABLE GROWTH Retail Net Sales Sell- • Consistent growth in Americas Through Q3'17 Q3'16 YoY YoY CC YoY – Strength in Mobile Speakers and Gaming Americas 291 271 7% 8% 18% – Continued strong performance from telco EMEA 233 198 18% 20% 19% channel Asia Pacific 143 126 1
Slide 13: Non-GAAP Gross Margin Reaches Record High of 37.4%
NON-GAAP GROSS MARGIN REACHES RECORD HIGH OF 37.4% • Gross margin rose 380 basis points (bps) Non-GAAP Gross Margin YoY and 40 bps QoQ to 37.4% 38.0% 37.4% 37.0% 37.0% • Better-than-expected sequential gross margin 36.0% 35.0% Target 35.6% results were led by continued focus on cost savings and bett
Slide 14: Opex Discipline with Investment for Long Term Growth
OPEX DISCIPLINE WITH INVESTMENT FOR LONG TERM GROWTH Q3'17 Q3'16 YoY • Operating expenses +11% (or +6% excluding Jaybird) Sales & Marketing 98 85 16% % of Retail Sales 14.7% 14.3% 40bp • Investments in S&M and R&D (offset by tight % of Sales 14.7% 13.7% 100bp G&A control) drives sustainable growth R
Slide 15: Strong Cash Management
STRONG CASH MANAGEMENT Q3'17 Q3'16 YoY • Cash from operations $147M in Q3; cash from operations $234M in first nine months of Cash from Operations 147 166 (12%) FY17 (vs $151M a year ago) Ending Cash Balance 514 505 2% Inventory 250 240 4% • Cash conversion cycle stable at 14 days Inventory Turns 6.
Slide 16: FY17 Outlook
FY17 OUTLOOK FY17 OUTLOOK Retail Sales CC Growth 12-13% Non-GAAP Operating Income $225-230M ASSUMPTIONS Currency FY16 Average Rates Effective Tax Rate 9-10% Cash From Operations ~1x Non-GAAP Operating Income CapEx ~$50M Share Count Slightly Declining 1 Stock-Based Compensation ~$30-35M Amortization
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Slide 18: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS 18
Slide 19: GAAP to Non-GAAP Reconciliations
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Slide 20: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the three and nine months ended December 31, 2016 are subject to adjustments, including completion of our evaluation of the changes in the fair value of contingent consideration for our acquisition of Jaybird LLC and other sub
Slide 21: Sell-Through Data
SELL-THROUGH DATA • Measures sales of our products by retailer customers to • Data is subject to limitations and possible error sources and may consumers and by our distributor customers to their not be an entirely accurate indicator of actual consumer demand for customers our products. Limitations
Slide 22: Logitech
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