Tech Data — Q4 FY2017 Earnings Presentation
24 slides from Tech Data's earnings presentation, Mar 8, 2017
Slide 1: Q4 Fiscal Year 2017 Financial Highlights
Q4 Fiscal Year 2017 Financial Highlights For the quarter ended January 31, 2017 March 8, 2017
Slide 2: Non-GAAP Financial Information
This document includes financial results prepared in accordance with generally accepted accounting principles (“GAAP”). In addition to GAAP results, Tech Data management believes that the presentation of non - GAAP financial measures is useful to investors because it provides investors with a more c
Slide 3: Worldwide Net Sales
Worldwide Q4 FY17: • Worldwide reported net sales of $7.4 billion decreased 1 % year - over - year and increased 14% sequentially. • On a constant currency basis worldwide net sales increased 2% year - over - year and increased 18% sequentially. -0.04 -0.02 0 0.02 0.04 0.06 0.08 0.1 0.12 $- $1.0 $2.
Slide 4: Americas Net Sales
Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Americas $2.7 $2.4 $2.7 $2.6 $2.7 Reported Y/Y growth 5% 2% -3% 2% 0% Adjusted y/y growth⁽¹⁾ 11% 4% -2% 2% 0% $2.7 $2.4 $2.7 $2.6 $2.7 -4% -2% 0% 2% 4% 6% 8% 10% 12% $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $ in Billions Net Sales Americas Q4 FY17: • America
Slide 5: Europe Net Sales
$ in Billions Net Sales Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Europe $4.8 $3.6 $3.7 $3.9 $4.7 Reported Y/Y growth 0% 1% -4% 1% -1% Y/Y CC growth⁽¹⁾ 11% 1% -2% 5% 3% $4.8 $3.6 $3.7 $3.9 $4.7 -5% -3% -1% 1% 3% 5% 7% 9% 11% 13% 15% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Europe 5 Q4 FY17: • Europe’s reporte
Slide 6: Gross Profit and Margin Worldwide
6 $354.6 $298.6 $316.5 $315.8 $371.0 4.74% 5.01% 4.98% 4.87% 5.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% $200.0 $220.0 $240.0 $260.0 $280.0 $300.0 $320.0 $340.0 $360.0 $380.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Gross Profit Gross Margin $ in Millions Quarterly Results Q4 FY17: • Gross profit of $3
Slide 7: SG&A Expenses (Non-GAAP) Worldwide
$237.8 $241.1 $238.4 $234.7 $248.9 3.18% 4.04% 3.75% 3.62% 3.35% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Non-GAAP SG&A exp $237.8 $241.1 $238.4 $234.7 $248.9 Non-GAAP SG&A % 3.18% 4.0
Slide 8: Operating Income (Non-GAAP) Worldwide
$116.8 $57.6 $78.1 $81.1 $122.1 1.56% 0.97% 1.23% 1.25% 1.64% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Non-GAAP Operating Income $116.8 $57.6 $78.1 $81.1 $122.1 Non-GAAP Operating Margin 1.56% 0.97% 1.23% 1.25% 1.64% GAAP Operating Inc $145.2 $52.6 $73.4 $62.9
Slide 9: Operating Income (Non-GAAP) The Americas
$38.8 $31.4 $38.8 $42.5 $47.4 1.44% 1.32% 1.45% 1.62% 1.75% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% $- $10.0 $20.0 $30.0 $40.0 $50.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Non - GAAP Operating Income⁽²⁾ $38.8 $31.4 $38.8 $42.5 $47.4 Non - GAAP Operating Margin⁽²⁾ 1.44% 1.32% 1.45% 1.62% 1.75% GAAP Oper
Slide 10: Operating Income (Non-GAAP) Europe
10 $81.5 $29.8 $43.1 $42.2 $77.7 1.70% 0.83% 1.17% 1.09% 1.65% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Non - GAAP Operating Income⁽²⁾ $81.5 $29.8 $43.1 $42.2 $77.7 Non - GAAP Operating Marg
Slide 11: Net Income and EPS (Non-GAAP) Worldwide
$80.9 $37.0 $50.3 $50.9 $87.0 $2.29 $1.05 $1.42 $1.44 $2.45 $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Non-GAAP Net Income $80.9 $37.0 $50.3 $50.9 $87.0 Non-GAAP EPS - diluted
Slide 12: Cash Metrics Worldwide
12 Cash Metrics Worldwide - $32 $276 - $91 $27 $445 -$150 -$50 $50 $150 $250 $350 $450 Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Cash Flow from Operations Cash Conversion Cycle $ Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Days of Sales Outstanding 37 39 39 40 37 Days of Supply 27 34 32 33 27 Days of Purc
Slide 13: Balance Sheet Highlights Worldwide
15% 15% 15% 15% 39% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Debt $367 $367 $362 $365 $1,363 Equity $2,006 $2,135 $2,108 $2,092 $2,170 Debt to Total Capital ratio 15% 15% 15% 15% 39% Debt to Total Capital 13 $ in Millions Balance Sheet Highlights Worldwide Q4 FY17: • Accumulated other comprehensive loss,
Slide 14: Return on Invested Capital Worldwide
10% 11% 13% 14% FY14 FY15 FY16 FY17 • Company’s Weighted Average Cost of Capital is approximately 9% (2) (1) See reconciliation of ROIC calculation in appendix. (2) Source: Bloomberg, February 28, 2017. 14 Return on Invested Capital (1) Worldwide $
Slide 15: Product Mix Worldwide
Total may not foot due to rounding. 15 Product Mix Worldwide • In Q4 FY17, the following vendors represented 10% or more of consolidated net sales: • Apple 24% • HP Inc. 12% Products FY17 (% of total net sales) Broadline Notebooks, Tablets, Desktops, Printers & Supplies Components 47% Data Center In
Slide 16: Appendix: GAAP to Non-GAAP Reconciliations
APPENDIX GAAP to Non - GAAP Reconciliations
Slide 17: SG&A Reconciliation
A - 1 Three months ended January 31, 2016 April 30, 2016 July 31, 2016 October 31, 2016 January 31, 2017 (In thousands) Net Sales $ 7,483,621 $ 5,963,362 $ 6,353,739 $ 6,490,265 $ 7,427,510 GAAP SG&A expenses 244,026$ 246,496$ 243,763$ 239,952$ 253,941$ Acquisition-related amortization of intangible
Slide 18: Operating Income Q4 FY17
A - 2 Operating Income Q4 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,707,286$ 4,720,224$ 7,427,510$ GAAP operating income ⁽ ¹ ⁾ 39,316$ 66,728$ (2,927)$ 103,117$ Acquisition and integration expenses 7,496 6,473 13,969 Acquisition-related amortization of inta
Slide 19: Operating Income Q3 FY17
A - 3 Operating Income Q3 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,614,347$ 3,875,918$ 6,490,265$ GAAP operating income ⁽ ¹ ⁾ 32,414$ 34,008$ (3,550)$ 62,872$ Acquisition and integration expenses 9,456 3,559 13,015 Acquisition-related amortization of intan
Slide 20: Operating Income Q2 FY17
A - 4 Operating Income Q2 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,674,886$ 3,678,853$ 6,353,739$ GAAP operating income ⁽ ¹ ⁾ 41,241$ 35,927$ (3,813)$ 73,355$ Value added tax assessments (407) 1,456 1,049 Acquisition and integration expenses 1,046 936 1,98
Slide 21: Operating Income Q1 FY17
A - 5 Operating Income Q1 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,388,004$ 3,575,358$ 5,963,362$ GAAP operating income ⁽ ¹ ⁾ 31,275$ 24,940$ (3,657)$ 52,558$ LCD settlements and other, net (443) - (443) Acquisition-related amortization of intangibles 580
Slide 22: Operating Income Q4 FY16
A - 6 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,699,276$ 4,784,345$ 7,483,621$ GAAP operating income ⁽ ¹ ⁾ 73,609$ 75,084$ (3,491)$ 145,202$ LCD settlements and other, net (35,346) - (35,346) Value added tax assessments - 767 767 Acquisition-related amortization
Slide 23: Net Income and Diluted EPS Reconciliation
A - 7 Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS GAAP Results $96,147 $2.72 $33,373 $0.94 $46,394 $1.31 $36,506 $1.03 $78,822 $2.22 LCD settlements and other, net (35,346) (1.00) (443) (0.01) (3,699) (0.10) - - - - Value added tax as
Slide 24: Return on Invested Capital Reconciliation
TTM Net Operating Profit After Tax Average Invested Capital – Average Cash TECD ROIC Formula: A - 8 January 31, 2014 January 31, 2015 January 31, 2016 January 31, 2017 Non-GAAP Net Operating Profit After Tax (NOPAT): Non-GAAP Operating Income $274,937 $307,985 $319,069 338,934$ Non-GAAP effective ta