Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Investor Day (October 2019)
56 slides from Insight Enterprises's investor day presentation, Oct 16, 2019
Slide 1: Brand and Digital Marketing
Brand and Digital Marketing Amy Protexter, SVP Marketing Exhibit 99.2
Slide 2: B2B Buyer Has Fundamentally Changed
B2B Buyer Has Fundamentally Changed 65% of tech decisions are now made by business leaders 68% of business buyers prefer to research on their own 73% find buying from the web more convenient 80% of buyers report that salespeople are not specialized enough 67% prefer not to interact with a sales rep
Slide 3: B2B Buyer Has Fundamentally Changed
B2B Buyer Has Fundamentally Changed 65% of tech decisions are now made by business leaders 68% of business buyers prefer to research on their own 73% find buying from the web more convenient 80% of buyers report that sales people are not specialized enough 67% prefer not to interact with a sales rep
Slide 4: Marketing's Role has Changed
Marketing’s Role has Changed Old B2B buyer funnel Brand Awareness Interest Consideration Intent Evaluation Decision Buy Marketing Sales Brand Awareness Interest Consideration Marketing New B2B buyer funnel Intent Evaluation Decision Buy Sales
Slide 5: Brand, Marketing, eCommerce Drive Client Engagement
Brand, Marketing, eCommerce Drive Client Engagement A powerful, evolving brand A robust, multi function digital platform to drive client engagement Simplified, touchless buying experience
Slide 6: The Brand is the Strategy; the Strategy is the Brand
The Brand is the Strategy; the Strategy is the Brand 2019 Intelligent Technology Solution Provider™ Differentiation White Papers, Thought Leadership Employee Value Proposition 2015-2016 Global rebrand House of brands to branded house Bold purpose, Inspirational Values New visual identity 2017 Resell
Slide 7: Our Brand Impact
Our Brand Impact Drive client loyalty “The values really resonate with my company. It’s the type of person we want to be associated with.” – Client interview “Insight is a different type of partner. They helped us drive real transformation.” – Client interview Drives employee engagement ”I joined fo
Slide 8: Impact of Ongoing Marketing Engagement
Impact of Ongoing Marketing Engagement All Insight 73% Marketing Engagement All Global/Enterprise /Supply Chain 83% Marketing Engagement Commercial 75% Marketing Engagement Solution Area Enterprise clients spend 3X and commercial clients spend 4X if engaging with marketing Highly efficient, highly s
Slide 9: Sales / Marketing Engagement Drives Lifetime Value
Sales / Marketing Engagement Drives Lifetime Value Small clients ramp to 8X year one sales by year 10, but significant TAM opportunity and low touch delivery makes very attractive market at scale Large clients ramp to 33X year one sales after 10 years as ongoing marketing engagement and cross sell p
Slide 10: Integrated, Sophisticated Digital Toolset
Integrated, Sophisticated Digital Toolset
Slide 11: Insight Intelligent Technology Index and Campaigns
Insight Intelligent Technology™ Index It Takes Insight Brand Campaign Insight Solution Area Campaigns Product Merchandising Thought Leadership Engagements through Many Channels, Strategies Demand Generation New Client Acquisition Unassisted Sales Social Media Co-Branded Campaigns Partner Merchandisi
Slide 12: Engaging Clients via a Frictionless Experience
Engaging Clients via a Frictionless Experience 73% find buying from the web more convenient Complex Configured Cloud subscription Frictionless B2C-Like Experience
Slide 13: Engaging Clients via a Frictionless Experience
Engaging Clients via a Frictionless Experience 73% find buying from the web more convenient Complex Global 50/ Fortune 500 Configured 1K – 5K Seats Cloud subscription All segments/2 Tier Frictionless B2C-Like Experience System to system integration Streamlined data reconciliation Automated approval
Slide 14: Insight + PCM = More Contacts, Channels
Insight + PCM = More Contacts, Channels 22 million contacts Platform to acquire new accounts Scalable, low cost marketing support High velocity acquisition remarketing Access to differentiated products Marketing
Slide 15: Validation of our Approach
Validation of our Approach “Insight has a unique brand story and sophisticated marketing engine that power a valued partnership with Microsoft.” - Jennifer Tomlinson, Global Channel Marketing Lead, Microsoft This slide needs to be designed with three pull quotes (the top three paragraphs) and then t
Slide 16: Brand, Marketing, eCommerce Drive Client Experience
Brand, Marketing, eCommerce Drive Client Experience A powerful, evolving brand A robust, multi function digital platform to drive client engagement Simplified touchless buying experience How Insight serves the 68%
Slide 17: Solution Area Overview
Solution Area Overview Wolfgang Ebermann, Steve Dodenhoff, Matt Jackson
Slide 18: Intelligent Technology Solution Provider
Intelligent Technology Solution ProviderTM Digital Innovation Supply Chain Optimization Connected Workforce Cloud + Data Center Transformation Cloud + Data Center Transformation Manage Today Transform Tomorrow
Slide 19: Supply Chain Optimization Remains a Key Priority
Supply Chain Optimization Remains a Key Priority ~54% of IT professionals are looking for resources that will give them greater visibility and insight into IT supply chain management, such as purchasing analytics. Source: 2019 Insight Intelligent Technology Index ~18% having fully automated IT procu
Slide 20: Supply Chain Optimization | Client Value Proposition
Supply Chain Optimization | Client Value Proposition Today’s challenges Automate procurement Supply Chain Management and Optimization Business and resource constraint Solutions Procurement Services Ecommerce Software lifecycle services Hardware lifecycle services Outcomes Reduced time, costs and res
Slide 21: Supply Chain Optimization | Key Client Benefits
Supply Chain Optimization | Key Client Benefits IT Supply Chain Optimization with Global Scale Build and Implement Intelligent Solutions Cost Efficient Supply Enable Digital Business
Slide 22: Creating a Modern Workplace Means Embracing Subscription Models
Creating a Modern Workplace Means Embracing Subscription-based Models and Managed Services ~73% indicate their organizations consume at least some bundled products and services, and the vast majority plan to continue or increase their bundled consumption. In the past year, ~51% of organizations have
Slide 23: Connected Workforce | Client Value Proposition
Today’s challenges Millennials Gig Economy Productivity Attracting and retaining talent Solutions Insight Managed Office Insight Managed Mobility Insight Managed Deployment Insight Managed Collaboration Workplace Services Outcomes Productive workplace Secure environment Simplified technology Streaml
Slide 24: Solution Area Cross-Sell
Solution Area Cross-Sell Supply Chain Optimization Connected Workforce American sandwich restaurant franchise with over 42,000+ restaurants in 100+ countries Employee onboarding and training Net new tablet device deployment Modern Apple provisioning Help Desk services Centralized depot services Syst
Slide 25: Data, Cloud and Security Remain High Priorities
By 2022, 90% of corporate strategies will explicitly mention information as a critical enterprise asset and analytics as essential competency.1 By 2021, over 75% of midsize and large organizations will have adopted a multicloud and/or hybrid IT strategy. 2 Cybersecurity concerns remain an issue; 91%
Slide 26: Cloud & Data Center Transformation | Client Value Proposition
Today’s challenges Workload complexity No one size fits all Security Efficiency Solutions Consulting Services Professional Services Managed Services Support Services Outcomes Business agility IT Transformation Operational efficiency Customer experience We help clients run workloads smarter. By defin
Slide 27: Driving Digital Transformation
Driving Digital Transformation Platform Modernization Accelerated speed of innovation and time to value Application Modernization Workload Alignment Migration Mapped all workload services and dependencies Migrating 80% of workloads Data Standardization Data Platform Data Accessibility Created enterp
Slide 28: Digital Innovation | Client Value Proposition
Today’s challenges Driving loyalty Leveraging data Competitive advantage Solutions Digital Transformation Workforce Applications Real-Time Business Outcomes Differentiated end-user experiences Monetized existing offerings New sale streams Maximized technology potential We help clients innovate smart
Slide 29: IoT project challenges
1. Cisco. (April 2017). The Journey to IoT Value — Challenges, Breakthroughs, and Best Practices IoT project challenges Successful IoT projects typically require 10+ different partners to execute.1 This means client organizations must manage multiple niche specialists, point technologies and integra
Slide 30: Solving Client Challenges through Digital Innovation
Solving Client Challenges through Digital Innovation Challenge: Crisis info sharing management Improve deployment of public safety mechanisms Solution: IoT-enabled safety platform Deployed Safe Spaces technology utilizing power of Microsoft Azure Outcome: City of Houston receives International Data
Slide 31: Solving Client Challenges through Digital Innovation
Challenge: Healthcare data is immense, highly secure, and very complex Research data isn’t tabulated or organized in the same way, making it difficult to combine and analyze with other studies Solution: Independent data repository In-depth search engine Azure secure analytics platform Outcome: A rob
Slide 32: Solving Client Challenges through Digital Innovation
Solving Client Challenges through Digital Innovation The challenge Improve on-site safety Reduce maintenance costs The solution Drone-based imaging solution IoT edge technology to process and prioritize images Cloud data platform The outcome Reduced maintenance costs Advance notice of potential acci
Slide 33: Pillars of Digital Innovation
Cloud enablement Data & AI Dev Ops Intelligent Applications IoT and Smart Edge Digital Strategy Transformation Services Pillars of Digital Innovation Digital experience provides winning solutions that engage customers and employees in new, meaningful ways. Disruptive technology innovations, both pro
Slide 34: Financial Overview and Vision
Financial Overview and Vision Glynis Bryan – Chief Financial Officer
Slide 35: Superior Financial Results
Superior Financial Results Net Sales ($B) Gross Profit ($M) & (%) SG&A % of Net Sales Adj. EFO* ($M) & (%) Discipline CAGR 7% CAGR 12% -30 bps CAGR 7% 13.6% 14.0% 2.6% 3.4% * Adjusted Non-GAAP measure excludes severance and restructuring expense and other unique items. See Non-GAAP information secti
Slide 36: Superior Financial Results
Superior Financial Results +45 bps ROIC* Adj. Diluted EPS* Discipline +760 bps CAGR 20% * Adjusted Non-GAAP measure excludes severance and restructuring expense and other unique items. See Non-GAAP information section in the Appendix of this presentation. +$200M Adj. Free Cash Flow*
Slide 37: Client Billed vs Net Sales Growth
Client Billed vs Net Sales Growth 5 Year CAGR 7% Discipline 61% 27% 12% 58% 32% 10% 54% 37% 9% 52% 40% 8% 54% 38% 8%
Slide 38: Strong and Improving Cash Conversion Cycle
Strong and Improving Cash Conversion Cycle Discipline Increased sales reported net drives more volatile cycle optically Stable mix and terms drives healthy cash flow generation
Slide 39: PCM: Financial Rationale
PCM: Financial Rationale Adds scale to top line and expands addressable market in corporate and mid-market clients 2018 PCM Net sales of $2.2 Billion at 15.9% gross margin Higher margin end markets Cross sell opportunity within Solution Areas Expands services capabilities adding more than $200 milli
Slide 40: Key Imperatives to Deliver Long-Term Value
Key Imperatives to Deliver Long-Term Value Expand EBITDA Margin Optimize Return on Invested Capital Grow Services Gross Profit as % of Total GP Measures Grow Sales Faster than the Market
Slide 41: Net Sales 8-10% CAGR
Net Sales 8-10 % (CAGR) Grow Sales Faster than the Market Discipline $7.1B 8 - 10% CAGR
Slide 42: Expand EBITDA Margin
5.0% - 5.5% Expand EBITDA Margin Adjusted EBITDA Discipline 3.9%* 5.0% - 5.5% * Adjusted Non-GAAP measure excludes severance and restructuring expense and other unique items. See Non-GAAP information in the Appendix of this presentation.
Slide 43: Optimize Return on Invested Capital
19% - 21% Optimize Return on Invested Capital ROIC Discipline 16.9%* 19% - 21% With PCM +760 bps 9.3%* * Adjusted Non-GAAP measure excludes severance and restructuring expense and other unique items. See Non-GAAP information in the Appendix of this presentation.
Slide 44: Grow Services Gross Profit as % of Total GP
50% - 52% Grow Services Gross Profit as % of Total GP Services Gross Profit Discipline 46% 50% - 52%
Slide 45: New Debt Structure - Capacity for Growth
New Debt Structure - Capacity for Growth Asset Based Loan (ABL) $1.2 Billion Funded PCM acquisition 5-year term, existing loan, variable rate Convertible Senior Notes $350M 5.5-year term, fixed value, fixed rate Hedged up to 100% conversion premium EPS impacted if stock price exceeds certain levels
Slide 46: Disciplined Capital Allocation Aligned with Shareholder Interests
Disciplined Capital Allocation Aligned with Shareholder Interests 1 Pursue strategic M&A Invest organically 2 4 Return excess cash to shareholders Discipline Scalable IT and service delivery platforms Digital Marketing and client facing tools Technical and sales talent Cultural / strategic / financi
Slide 47: Closing Comments
Closing Comments Ken Lamneck – Chief Executive Officer
Slide 48: Key 5-Year Imperatives to Deliver Value
Key 5-Year Imperatives to Deliver Value 5.0% – 5.5% Expand EBITDA Margin 19% – 21% Optimize Return on Invested Capital 50% – 52% Grow Services Gross Profit as % of Total GP Value Creation for Insight Shareholders, Clients, Partners and Teammates Measures 8% – 10% (CAGR) Grow Sales Faster than the Ma
Slide 49: Q&A Session
Q&A Session Insight Executive Team
Slide 50: Appendix
. . “be A a Insight: Ah a ll ‘yy Z ay 7) Appendix
Slide 51: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures
Slide 52: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures
Slide 53: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures * Assumed tax rate of 28% for 2018 and 37% for 2013. ** Average of previous five quarters. *** Computed as Adjusted non-GAAP consolidated EFO, net of tax divided by invested capital
Slide 54: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures
Slide 55: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures
Slide 56: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures EBITDAS - earnings from continuing operations before interest, taxes, depreciation, amortization and stock-based compensation. Represents PCM's equity income resulting from 49% ownership interest in the NCE. Represents adjustment to contingent co