Logitech International S.a. · SIX:LOGN
Logitech International — Q3 FY2020 Earnings Presentation
21 slides from Logitech International's earnings presentation, Jan 20, 2020
Slide 1: Q3 Fiscal Year 2020 Financial Results
logitech Q3 Fiscal Year 2020 Financial Results Newark, January 20, 2020 6
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and nine months ended December 31, 2019, macroeconomic trends,
Slide 3: Key Messages — Q3 FY 2020
KEY MESSAGES —- Q3 FY 2020 Q3'20 sales up 5% (CC) to a record $903M, led by continued strong gains in Video Collaboration and a return to double-digit growth in Gaming Despite incremental China tariff headwinds, gross margin was a better-than-expected 37.6%, driven by operational execution, continue
Slide 4: What's New from Logitech
WHAT'S NEW FROM LOGITECH
Slide 5: Keyboards & Combos
KEYBOARDS & COMBOS The Logitech ERGO K860 is a science- driven certified ergonomic keyboard that delivers a more natural typing experience to help you work and feel better at your desk A split, curved keyframe improves typing posture and reduces muscle strain on your wrists and forearms The pillowed
Slide 6: Gaming
GAMING Compatible with the Xbox Adaptive Controller (XAC), the Logitech G Adaptive Gaming Kit is designed for gamers with accessibility needs Features a large assortment of buttons and triggers with gaming-grade components for performance and durability Developed in collaboration with the Microsoft
Slide 7: Environmental, Social, Governance (ESG) FY19 Highlights
Environmental, Social, FYI9 Highlights GIVING BACK 37 Give back events EMPLOYEE DEVELOPMENT 1,660+ employees participated with 600+ volunteers in development in TS cities ond programs worldwide 10 countries SUPPLY CHAIN AUDITS GLOBAL RECYCLING RBA Code of Conduct ‘tons financed since CYI0 % 27,386 1
Slide 8: Financial Results
FINANCIAL RESULTS
Slide 9: Q3'20 Results Set Record Highs
Q3’20 RESULTS SET RECORD HIGHS soos | S864 YoY % chg 4% 6% YoY % chg (CC) 5% 8% Gross profit 340 330 3% % margin 37.6% 38.1% (50 bps) Operating expense 188 186 1% % of sales 20.8% 21.6% (80 bps) % margin 16.8% 16.6% 20 bps Net income 143 134 7% % margin 15.9% 15.5% 40 bps Earnings per share $0.84 $0
Slide 10: Balanced Portfolio Drives Consistent Growth
BALANCED PORTFOLIO DRIVES CONSISTENT GROWTH rem Pointing Devices Keyboards & Combos 156 PC Webcams 32 Tablet & Accessories 31 Video Collaboration 92 Mobile Speakers 93 Audio & Wearables 82 Gaming 246 Smart Home Note: Net sales in $ millions. Comparisons are YoY and in US$ unless otherwise specified.
Slide 11: Strong EMEA Offsets Softer Americas and Asia
STRONG EMEA OFFSETS SOFTER AMERICAS AND ASIA MCUENEES ese (cc) | _(USS) 2) a decline in Mobile Speakers and Audio & Americas 386 (1%) (1%) 0% Wearables, offset in part by growth in EMEA 309 269 16% 14% 9% other major categories Asia Pacific 3% 2% 7% i i" i EMEA sales growth accelerated to +16% $903
Slide 12: Strong Margin Performance Despite Headwinds
STRONG MARGIN PERFORMANCE DESPITE HEADWINDS 41% 40% 39% 38% 37% 36% 35% 34% One-time benefit from legal settlement ! I I I { k I I Ie Ql Q2'19 Non-GAAP Gross Margin Q3'19 Q419 Note: Figures are for illustrative purposes only. (1) Q119 non-GAAP gross margin includes a one-time benefit of ~60 basis po
Slide 13: Continued Investments for Long-Term Growth
CONTINUED INVESTMENTS FOR LONG-TERM GROWTH i 9 cae os'9 la Operating expenses +1%, as we balanced near-term cost 9 . . : Sales & marketing % containment with continued % of sales 14.3% 14.8% (50 bps) investments for long-term growth Research & development 41 39 6% wo ° % oF sales ABS ABS Obes R&D sp
Slide 14: Improved Turns Led to Strong Cash Flows
IMPROVED TURNS LED TO STRONG CASH FLOWS a Sa Cash flow from operations was $181M, versus $176M in the same period last Cash from operations year Ending cash balance ' 656 586 70 81 Inventory 307 342 (35) (31) Reduced inventory by $35M and Inventory turns 7.4 6.3 1.7 turn 2.7 turns reached nea r-reco
Slide 15: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK FY’'20 OUTLOOK Sales CC growth Mid to high single-digits Non-GAAP operating income $375 - 385M Currency FY'20 9 months actual and Q4'20 projection ' Non-GAAP effective tax rate 7-8% Cash from operations ~1x non-GAAP operating income Capex $40 - 50M Note: Comparisons are YoY
Slide 16: Appendix
APPENDIX
Slide 17: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS LOGITECH INTERNATIONAL S.A. PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION 4!) Three Months Ended December 31, SUPPLEMENTAL FINANCIAL INFORMATION 2019 2018 Gross profit - GAAP 334,453 $ 323,982 Share-based c
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS LOGITECH INTERNATIONAL S.A. PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION Three Months Ended December 31, SUPPLEMENTAL FINANCIAL INFORMATION 2019 2018 Operating income - GAAP $ 128,828 $ 123,384 Share-based
Slide 19: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the month ended December 31, 2019 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q. (A) Preliminary Valuation from the Business Acquisition The
Slide 20: Sell-Through Data
SELL-THROUGH DATA Measures sales of our products by retailer customers to consumers and by our distributor customers to their customers Compiled by Logitech from data supplied by our customers Customers supplying sell-through data vary by geographic region and from period to period, but typically re
Slide 21: Logitech
logitech
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