Slide 1: Avnet Fiscal First Quarter 2022 Financial Results
Avnet Fiscal First Quarter 2022 Financial Results October 28th, 2021
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
Slide 4: Strong Execution & Market Driving Outperformance
Strong Execution & Market Driving Outperformance • Solid execution and progressing on margin expansion efforts by: • Accelerating the growth of higher margin Farnell business • Supporting the growth of core distribution business through investments to improve efficiencies and strengthen partner rela
Slide 5: Second Consecutive Quarter of Record Revenues
Second Consecutive Quarter of Record Revenues YoY Total Revenue Growth ($M) • Achieved revenues of $5.6B, up 7.6% sequentially and $5,585 17.5% year over year in constant currency $4,723 • Excluding TI and the extra week in the prior year, sales grew 32.9% year over year in constant currency • Recor
Slide 6: Investments in EC Yielding Organic Growth
Investments in EC Yielding Organic Growth • Record revenues of $5.1B were up sequentially and YoY: • Another record sales quarter in Asia YoY EC Revenue Growth ($B) • Solid, consistent performance at EMEA $5.1 • Promising improvement in the Americas $4.4 • Design wins and registrations continue to b
Slide 7: Strategic Investments in Farnell Yield Solid Returns
Strategic Investments in Farnell Yield Solid Returns • Record revenues up sequentially and YoY at $455 million YoY Farnell Revenue Growth ($M) • Increased operating margins to 10.9% $455.2 • ~53% of revenues and 69% of total transactions $340.9 attributed to e-commerce sales in the quarter • Added 1
Slide 8: Financial Overview
Financial Overview Tom Liguori Chief Financial Officer
Slide 9: Record Sales and Strong EPS Growth
Record Sales and Strong EPS Growth Total Revenues ($M) Adjusted Diluted EPS (1) $1.22 $5,585 $1.12 $5,227 $4,723 $4,917 $4,668 $0.74 $0.48 $0.36 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 FY21* FY21 FY21 FY21 FY22 FY21* FY21 FY21 FY21 FY22 Electronic Components Farnell (1) Non-GAAP measure. See Non-GAAP Definiti
Slide 10: Improving Return on Invested Capital
Improving Return on Invested Capital 2nd consecutive quarter of record sales at Electronic Components and Farnell Achieved 3.2% operating margin for Electronic Components and 10.9% for Farnell 11% Adjusted operating expenses declining ROIC $12 million sequentially Decreased working capital days to 6
Slide 11: Built to Sustain at Least 3 - 3.5% Operating Margins
Built to Sustain at Least 3 - 3.5% Operating Margins 5th consecutive quarter of adjusted operating Controlled operating expenses, improving the ratio margin improvement (1) of adjusted op ex to gross profit dollars QoQ (1) 3.2% 91.0% 87.4% 84.4% 2.9% 80.6% 76.5% 72.9% 2.3% 1.7% 1.4% 1.0% Q4 Q1 Q2 Q3
Slide 12: Q1 FY22 Income Statement Snapshot
Q1 FY22 Income Statement Snapshot Gross margin; down slightly QoQ due to Gross Margin Improvement 11.8% regional mix, but up YoY 11.8% Adjusted operating expenses (1); down by $481M 2.5% over last quarter 10.9% $22.8M Interest expense $5.1M Foreign currency transaction expense Q1 Q1 FY21 FY22 21% Ad
Slide 13: Strong Momentum Across Business Segments
Strong Momentum Across Business Segments • Revenues of $5.1B, up 17.1% YoY and • Revenues of $455M, up 33.5% YoY Electronic 7.2% sequentially and 3.1% sequentially Components • Operating margins of 3.2%, up 124 bps • Operating margins of 10.9%, up 738 bps Farnell year over year year over year EC Seq
Slide 14: Disciplined Working Capital Management
Disciplined Working Capital Management Improved Working Capital Days $299M Cash balance 79 $1.5B Available lines of credit 75 72 70 69 2.1x Gross debt leverage ratio at end of quarter 1.7x Net debt leverage ratio at end of quarter Q1 Q2 Q3 Q4 Q1 FY21 FY21 FY21 FY21 FY22 $41 Net book value 14
Slide 15: Capital Allocation Priorities
Capital Allocation Priorities Balanced approach with about half to reinvestment in our business and half to shareholder returns • Reinvestments focused on: FY22 capital allocation plan • Cap ex for distribution centers and business systems M&A / Investments • Continued efficiency improvement 25% • M
Slide 16: Outlook for Q2 FY 2022
Outlook for Q2 FY 2022 (ending on January 1, 2022) Metric Guidance Range Midpoint Sales $5.3B – $5.7B $5.5B Non-GAAP Adjusted Diluted EPS (1) $1.20 – $1.30 $1.25 • Assumes ongoing strong demand, continuing supply constraints, Factors impacting and associated electronic components price inflation our
Slide 17: Building a More Durable Business
Building a More Durable Business Financial objectives: ✓ Maintain sustainable operating margins of at least 3 to 3.5% ✓ Grow higher value-add businesses ✓ Deliver a reliable and increasing dividend ✓ Repurchase our shares opportunistically ✓ Invest in organic and inorganic growth 17
Slide 18: Q&A Session
/ Q&A Session
Slide 19: 100 Years of Adapting to Wave After Wave of Change
100 Years of Adapting to Wave After Wave of Change Looking ahead: Avnet is delivering strong revenue growth and steady margin improvement and has made significant, durable changes that position us to: • Capture growth, • Continue to invest in our business, • Sustain at least 3 – 3.5 % operating marg
Slide 20: Thank You
/ Thank You
Slide 21: 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