Slide 1: Q4 2023 Earnings
Q4 2023 Earnings February 21, 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with s
Slide 3: Business Update
Business Update Cliff Pemble President and CEO
Slide 4: Consolidated Q4 2023 results
Consolidated Revenue Operating income Operating margin Q4 2023 $1.48B $340M 23.0% 13% y/y growth 27% y/y growth BUSINESS INSIGHTS • Double-digit growth results in record revenue • Gross and operating margins improved over Q4 2022 • Strong double-digit operating income growth • Proforma EPS of $1.72,
Slide 5: Consolidated FY 2023 results
Consolidated Revenue Operating income Operating margin FY 2023 $5.23B $1.09B 20.9% 8% y/y growth 6% y/y growth BUSINESS INSIGHTS • Record consolidated revenue • Strong cash flow driven by inventory reductions • Optimistic outlook for 2024 • Proposing an increased dividend and announced a new share r
Slide 6: Fitness
Fitness Revenue Operating income Operating margin FY 2023 $1.34B $232M 17% 21% y/y growth 122% y/y growth SEGMENT INSIGHTS • Revenue growth across all product categories • Operating profit more than doubled year-over-year • Venu 3 was recognized with three awards at CES • 2024 revenue growth estimat
Slide 7: Outdoor
Outdoor Revenue Operating income Operating margin FY 2023 $1.70B $515M 30% 4% y/y decline 10% y/y decline SEGMENT INSIGHTS • Improved performance in the second half of the year • MK3 series expands our dive product portfolio • Added solar charging technology to our popular eTrex handhelds • 2024 rev
Slide 8: Aviation
Aviation Revenue Operating income Operating margin FY 2023 $846M $226M 27% 7% y/y growth 6% y/y growth SEGMENT INSIGHTS • Revenue growth driven by OEM product categories • G3000 flight deck selected by EVE Air Mobility • Ranked No. 1 in product support for 20th consecutive year • 2024 revenue estima
Slide 9: Marine
Marine Revenue Operating income Operating margin FY 2023 $917M $179M 20% 1% y/y growth 17% y/y decline SEGMENT INSIGHTS • Recently acquired JL Audio primary driver of revenue growth • Strong product lineup led to market share gains • Launched the Echomap Ultra 2 chartplotter series and GSD 28 deep w
Slide 10: Auto OEM
Auto OEM Revenue Operating income Operating margin FY 2023 $423M ($61M) (14%) 49% y/y growth SEGMENT INSIGHTS • Growth driven by increasing shipments of domain controllers • New business win expands our domain controller customer base • 2024 revenue growth estimate: +50%
Slide 11: Financial Update
Financial Update Doug Boessen CFO and Treasurer
Slide 12: Income Statement Q4
Income Statement Q4 (in millions) Q4 2023 Q4 2022 Y/Y Net sales $1,483 $1,306 13% Gross profit 864 745 16% Margin % 58.3% 57.0% 130 bps Operating expenses 524 478 10% Operating income $340 $267 27% Margin % 23.0% 20.5% 250 bps GAAP EPS $2.82 $1.53 84% Pro Forma EPS $1.72 $1.35 27%
Slide 13: Income Statement Full Year
Income Statement Full Year (in millions) FY 2023 FY 2022 Y/Y Net sales $5,228 $4,860 8% Gross profit 3,005 2,807 7% Margin % 57.5% 57.7% (20 bps) Operating expenses 1,913 1,779 8% Operating income $1,092 $1,028 6% Margin % 20.9% 21.1% (20 bps) GAAP EPS $6.71 $5.04 33% Pro Forma EPS $5.59 $5.13 9%
Slide 14: Revenue Q4
Revenue Q4 (in millions) Q4 2023 Q4 2022 Change Fitness $412 $337 22% Outdoor 486 451 8% Aviation 217 225 (4%) Marine 240 211 14% Auto OEM 127 82 54% Total $1,483 $1,306 13% (in millions) Q4 2023 Q4 2022 Change Americas $733 $649 13% EMEA 523 441 19% APAC 226 217 4% Total $1,483 $1,306 13%
Slide 15: Revenue Full Year
Revenue Full Year (in millions) FY 2023 FY 2022 Change Fitness $1,345 $1,109 21% Outdoor 1,697 1,770 (4%) Aviation 846 793 7% Marine 917 904 1% Auto OEM 423 284 49% Total $5,228 $4,860 8% (in millions) FY 2023 FY 2022 Change Americas $2,614 $2,429 8% EMEA 1,776 1,634 9% APAC 838 798 5% Total $5,228
Slide 16: Operating Expenses
Operating Expenses R&D SG&A Advertising $250 $237 $225 $225 $216 $204 $200 $175 $150 (in millions) $125 $100 $75 $58 $61 $50 $25 $0 Q4 2022 Q4 2023
Slide 17: Other Financial Items FY 2023
Other Financial Items FY 2023 Balance Sheet Cash Flow Taxes Cash and Marketable Securities Free Cash Flow Pro Forma $3.09B $1.18B Effective Tax Rate Accounts Receivable Capital Expenditures 8.5% $815M $194M Inventory Dividends Paid $1.35B $559M Share Repurchases $99M
Slide 18: Guidance 2024
Guidance 2024 Revenue $5.75B Gross margin 56.5% Operating margin 20.0% Pro forma Tax rate 15.5% Pro forma EPS $5.40 All amounts and %’s are approximate.
Slide 19: Garmin
A GARMIN.
Slide 20: Appendix
Appendix February 21, 2024
Slide 21: Change in reportable segments
Change in reportable segments The Company announced an organization realignment in January 2023, which combined the consumer auto operating segment with the outdoor operating segment. As a result, the Company’s operating segments, which also represent our reportable segments, are fitness, outdoor, a
Slide 22: Non-GAAP Financial Information
Non-GAAP Financial Information To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share
Slide 23: Pro forma effective tax rate
Pro forma effective tax rate The Company’s income tax expense is periodically impacted by discrete tax items that are not reflective of income tax expense incurred as a result of current period earnings. Therefore, management believes the effective tax rate and income tax provision before the effect
Slide 24: Pro forma net income (earnings) per share
Pro forma net income (earnings) per share Management believes that net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure in order to permit a consistent comparison of the Company’s perf
Slide 25: Free cash flow
Free cash flow Management believes that free cash flow is an important liquidity measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flows less capital expenditures for property and equipment. Management believes th
Slide 26: Forward-looking financial measures
Forward-looking financial measures The forward-looking financial measures in our 2024 guidance provided above do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items and any other impacts that may be identified as pro forma adjustment