Slide 1: Insight Enterprises, Inc. First Quarter 2019 Earnings Conference Call
Insight Enterprises, Inc. First Quarter 2019 Earnings Conference Call and Webcast 1 Insight Presentation Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved.
Slide 2: Agenda
Agenda • Opening Comments • CEO Commentary • First Quarter 2019 Consolidated Financials • First Quarter 2019 Highlights • Digital Innovation Case Study • CFO Commentary • Financial results by region • Taxes and cash flow • Closing Comments & 2019 Guidance Insight Proprietary & Confidential. Do Not C
Slide 3: Disclosures
Disclosures • Safe harbor statement This presentation includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 related to Insight’s plans and expectations. Statements that are not historical facts, including statements about future trends in th
Slide 4: CEO Commentary
CEO Commentary 4 Insight Presentation Insight Insight Proprietary Proprietary & & Confidential. Confidential. Do Do Not Not Copy Copy or or Distribute. Distribute. © © 2019 2019 Insight Insight Direct Direct USA, USA, Inc. Inc. All All Rights Rights Reserved. Reserved. 4
Slide 5: Q1 2019 Year over Year Results
Q1 2019 Year over Year Results Net Sales Gross Profit Gross Margin -3% YoY +3% YoY +90 bps YoY 14.7% $248.5M $1.69B 2018 2019 2018 2019 2018 2019 Three Months Ended 3/31 Three Months Ended 3/31 Three Months Ended 3/31 Adjusted Earnings from operations* Adjusted Diluted EPS* SG&A as a % of Gross Prof
Slide 6: Q1 2019 Highlights
Q1 2019 Highlights • Gross profit growth and gross margin expansion • NA gross profit +4% YoY | gross margin +100 bps YoY • EMEA gross profit +9% YoY in CC* | gross margin +80 bps YoY • APAC gross profit +9% YoY in CC* | gross margin +130 bps YoY • Gross profit from cloud services +18% of total gros
Slide 7: Our go-to market strategy
Our go-to market strategy Supply Chain Connected Cloud + Data Center Digital Innovation Optimization Workforce Transformation Client Conversation Client Conversation Client Conversation Client Conversation Operational Excellence Workforce enablement Infrastructure optimization Customer engagement Cl
Slide 8: Digital Innovation Case Study
Digital Innovation Case Study Need • Crisis information sharing management • Improved deployment of public safety mechanisms Solution • Implemented IoT-enabled building safety platform - ActiveShield • Deployed Safe Spaces technology, utilizes power of Microsoft Azure • Facilitates real-time informa
Slide 9: CFO Commentary
CFO Commentary 9 Insight Presentation Insight Insight Proprietary Proprietary & & Confidential. Confidential. Do Do Not Not Copy Copy or or Distribute. Distribute. © © 2019 2019 Insight Insight Direct Direct USA, USA, Inc. Inc. All All Rights Rights Reserved. Reserved. 9
Slide 10: Q1 2019 North America | Financial Results
Q1 2019 North America | Financial Results Net Sales Gross Profit Gross Margin -3% YoY +4% YoY +100 bps YoY 14.7% $1.24B $182.6M 2018 2019 2018 2019 2018 2019 Three Months Ended 3/31 Three Months Ended 3/31 Three Months Ended 3/31 Adjusted Earnings from operations* SG&A as a % of Gross Profit -60 bps
Slide 11: Q1 2019 EMEA | Financial Results
Q1 2019 EMEA | Financial Results Net Sales Gross Profit Gross Margin +2% YoY constant currency** +9% YoY constant currency** +80 bps YoY 14.6% $390.2M $57.0M 2018 2019 2018 2019 2018 2019 Three Months Ended 3/31 Three Months Ended 3/31 Three Months Ended 3/31 Adjusted Earnings from operations* SG&A
Slide 12: Q1 2019 APAC | Financial Results
Q1 2019 APAC | Financial Results Net Sales Gross Profit Gross Margin +1% YoY constant currency** +9% YoY constant currency** +130 bps YoY 16.8% $52.9M $8.9M 2018 2019 2018 2019 2018 2019 Three Months Ended 3/31 Three Months Ended 3/31 Three Months Ended 3/31 Adjusted Earnings from operations* SG&A a
Slide 13: Cash Flows and Cash Cycle
Cash Flows and Cash Cycle Net cash from operations Adjusted free cash flow* Cash conversion cycle -$29M YoY +$18M YoY -6 days YoY $72.6M 30 days $121.9M 2018 2019 2018 2019 2018 2019 Three Months Ended 3/31 Three Months Ended 3/31 Three Months Ended 3/31 Days sales outstanding (“DSOs”) Days inventor
Slide 14: Our priorities are clear
Our priorities are clear Drive profitable growth. Maintain discipline. Optimize use of capital. • Solution Areas focus • Profitability first • Organic growth • New client acquisition • Metric and information- • M&A focused on skills and based culture geographic markets • Digital marketing enablement
Slide 15: We are well positioned to compete
We are well positioned to compete Our value drivers • Deep knowledge in client-relevant solution areas with opportunity for growth • History of adapting business model to respond to new technology trends, including the cloud • Differentiated consulting, technology and managed services offerings • Ab
Slide 16: Closing Comments
Closing Comments • 2019 sales expected to grow in the low single digit range • Adjusted diluted earnings per share* expected to be between $4.75 and $4.85 per share for the full year 2019 • Effective tax rate expected between 25% and 26% over the balance of 2019 • Capital expenditures of $20 to $25
Slide 17: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended March 31, US Dollar in $000s, except per share data 2019 2018 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 57,039 $ 50,439 Severance and restructuring expenses 370 1,644 Adjusted non-GAAP c
Slide 18: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended March 31, US Dollar in $000s 2019 2018 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 45,326 $ 42,288 Severance and restructuring expenses 331 443 Adjusted non-GAAP
Slide 19: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended March 31, US Dollar in $000s 2019 2018 Adjusted free cash flow: Net cash provided by operating activities $ 121,913 $ 150,745 Purchases of property and equipment (5,352) (5,044) Net repayments under inven