Logitech International S.a. · SIX:LOGN
Logitech International — Q1 FY2019 Earnings Presentation
23 slides from Logitech International's earnings presentation, Jul 31, 2018
Slide 1: Q1 Fiscal Year 2019 Financial Results
logitech Q1 Fiscal Year 2019 Financial Results Lausanne, July 31, 2018
Slide 2: 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 months ended June 30, 2018, implications of a good first quarter, vision of our future co
Slide 3: Key Messages - Q1 FY 2019
KEY MESSAGES - Q1 FY 2019 Strong momentum continued, with Q1’19 sales up 12% (CC) to $608M A focus on Gaming +68% (CC) and Video Collaboration +60% (CC) offset performance in Mobile Speakers and Smart Home Healthy gross margin of 37.4% enables us to re-invest in our capabilities and realign resource
Slide 4: What's New from Logitech
— WHAT gaa FROM LOGITECH Wife Auk Se 4 het = pF -_ 7 's -, wT ye | aN ue ae 4 Mf .¥ - . a > ’ v. aa j ~ > ”
Slide 5: Gaming
GAMING Logitech G305 brings our premium LIGHTSPEED wireless technology and the HERO™ (High Efficiency Rated Optical) sensor to mainstream gamers Faster than most wired mice with a 1ms response time Provides exceptional responsiveness and accuracy Capable of achieving high performance at 10 times the
Slide 6: Gaming
GAMING is a high-performance RGB mechanical gaming keyboard built on the award-winning design of the G413 offers three key switches to fit personal player preferences: Tactile, Linear, or the new GX Blue The three switches provide a range of keyboard feedback, from a discernible actuation (Tactile)
Slide 7: Video Conference
VIDEO CONFERENCE Logitech Rally is a modular system that delivers premium audio and 4K video Extends reach of existing portfolio to larger conference rooms by separating the speakers from the microphone Features new intelligent Logitech RightSense technologies that leverage computer vision to automa
Slide 8: Presenter
PRESENTER Logitech R500 Laser Presentation Remote is an updated remote made for physical type presentations with a projector screen, flip charts, or 3D models Includes an easy-to-read red laser pointer with a distance of up to 65 feet Designed with a contoured shape, a soft rubber surface, and textu
Slide 9: Blue Microphones
BLUE MICROPHONES Agreed to acquire Blue Microphones for approximately $117M in cash, assuming breakeven net working capital Leader in studio-quality microphones for professionals and consumers Expected to contribute roughly one point of sales growth in FY 2019 Deal is expected to close by the end of
Slide 10: 10
10
Slide 11: Q1'19 Results Sustain Momentum
Q1'19 RESULTS SUSTAIN MOMENTUM YoY % chg 15% 10% YoY % chg (CC) 12% 13% Gross profit 227 196 16% % margin 37.4% 37.0% 40 bps Operating expense 167 153 9% % of sales 27.4% 28.9% (150 bps) % margin 9.9% 8.1% 180 bps Net income 57 40 45% % margin 9.4% 7.5% 190 bps Earnings per share $0.34 $0.24 42% Dil
Slide 12: Doubling Down on Higher Growth Markets
DOUBLING DOWN ON HIGHER GROWTH MARKETS CS Pointing Devices Keyboards & Combos 128 PC Webcams 30 Tablet & Accessories 32 Video Collaboration 59 Mobile Speakers 34 Audio & Wearables 52 Gaming 136 Smart Home 116 26 23 36 63 50 78 5% 10% 16% 40% 65% (45%) 4% 75% (45%) 7% 13% 37% 60% (46%) 2% 68% (46%) G
Slide 13: All Three Regions Delivered Growth
ALL THREE REGIONS DELIVERED GROWTH ENS en (uss) | (CC) ES) PC Peripheral sales and very robust Americas 13% 13% 13% growth from Gaming and Video EMEA 161 151 7% 1% 9% Collaboration offsetting a slowdown in Mobile Speakers and Smart Home Asia Pacific 134 28% 30% Sales growth YoY % (CC) Sales growth Y
Slide 14: Gross Margin Remains Within Target Range
GROSS MARGIN REMAINS WITHIN TARGET RANGE 38% 37% 36% 35% 34% 33% 32% aig Non-GAAP Gross Margin One-time cost from dual DCs! One-time benefit from legal settlement ? 218 Note: Figures are for illustrative purposes only. (1) Q3’18 non-GAAP gross margin includes ~150 basis points of cost headwinds from
Slide 15: Disciplined Investments for Long-Term Growth
DISCIPLINED INVESTMENTS FOR LONG-TERM GROWTH excluding acquisitions) as we Sales & marketing prudently re-invested for growth % of sales 17.9% 18.5% (60 bps) Research & development 37 34 12% Increased spending in S&M (+11%) © : . % of sales 6585 6.3% (10 bps) and R&D (+12%) while continued to reduce
Slide 16: Maintaining Solid Working Capital Metrics
MAINTAINING SOLID WORKING CAPITAL METRICS operations in a traditionally low cash Cash from operations 12 flow quarter Ending cash balance 604 528 76 Inventory 273 279 (7) Cash conversion cycle of 41 days, due Inventory turns 5.6 4.8 0.8 turns to adoption of new revenue standard, ASC 606 (which had a
Slide 17: Raising Fiscal Year 2019 Outlook
RAISING FISCAL YEAR 2019 OUTLOOK FY 2019 OUTLOOK NEW OLD Sales CC growth Up 9-11% ' Up high single-digits Non-GAAP operating income $325 -335M' $310 - 320M Currency FY 2018 average rates Non-GAAP effective tax rate 7- 8% Cash from operations 1x non-GAAP operating income Capex ~$50M Note: Comparisons
Slide 18: 18
18
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “ Three Months Ended June 30, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 Gross profit - GAAP 223,937 193,668 Share-based compensation expense 1,130 711 Amorti
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “ Three Months Ended June 30, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 Operating income - GAAP $ 32451 S$ 31,425 Share-based compensation expense 13,259 10,
Slide 21: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the three months ended June 30, 2018 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q. (A) Non-GAAP Financial Measures To supplement our conden
Slide 22: 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 23: Logitech
logitech
Logitech International — Q1 FY2019 Earnings Presentation on 6ix