Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Q4 2021 Earnings Presentation
28 slides from Insight Enterprises's earnings presentation, Feb 10, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Fourth Quarter and Full Year 2021 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 • Disclosures • CEO Commentary • Our Expertise and Services • 2021 Industry Accolades and Partner Recognitions • Primary Business Goals • CFO Commentary • Fourth Quarter and Full Year 2021 Financial Highlights • Cashflow and Debt Covenants • 2022 Outlook • Closing Comments Insight Proprietary
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 those related to coronavirus strain
Slide 4: Well Positioned to Help Organizations
Well Positioned to Help Organizations Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 4
Slide 5: Unified Communications with Insight Services
Unified Communications with Insight Services Unified, cost-effective Decommissioned Expanded cloud connectivity for 3,500 data center to reduce footprint with unified locations on-site footprint communications Expedited project Pioneered the first instance of cloud timeline communications as a servi
Slide 6: Global Retailer Improves Operations with Modern Application Framework
Global Retailer Improves Operations with Modern Application Framework Greater visibility Insight Provided: across devices • Roadmap for deployment • Significant pilot test phase Dedicated asset management • Ongoing guidance • Asset management Enhanced employee Insight Services: engagement • Consulti
Slide 7: 2021 Industry Accolades
2021 Industry Accolades Insight 2021 industry accolades No. 360 INSIGHT LEADERSHIP RECOGNITIONS 500 Glynis Bryan Jeff Shumway Phoenix Business Journal ArizonaCIO 2021 Most Admired Leaders Global CIO of the Year Most Gender Diverse Executive John Dathan Samuel C. Cowley Teams in Technology for 2021 G
Slide 8: 2021 Partner Recognitions
2021 Partner Recognitions Migration to Azure Solution Surface & M365 Microsoft US Microsoft Security 20/20 Microsoft Canada Partner of the Year Assessments Solution Selling Partner Award in Partner of the Year Impact Awards Partner of the Year Partner of the Year Modernizing 1. Microsoft Azure Secur
Slide 9: Primary Business Goals
Primary Business Goals Earn Client Loyalty Drive Profitable Growth Be client obsessed and deliver exceptional Deliver high value solutions supported by client outcomes. operational excellence and integrated global systems. Lead with Services & Solutions Champion People, Leadership and Culture Delive
Slide 10: CFO Commentary
CFO Commentary • Fourth Quarter and Full Year 2021 Financial Highlights • Cashflow and Debt Covenants • 2022 Outlook Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 10
Slide 11: Fourth Quarter 2021 Highlights
Fourth Quarter 2021 Highlights • Net Sales of $2.6 billion • Gross profit of $385 million • Gross margin 15.0% • SG&A up 13% in US dollars, up 12% year over year in constant currency • 11.3% - GAAP SG&A as a percent of net sales • 11.0% - Adjusted SG&A as a percent of net sales* • GAAP EFO of $93 mi
Slide 12: Full Year 2021 Highlights
Full Year 2021 Highlights • Net Sales of $9.4 billion • Gross profit of $1.4 billion • Services gross profit 49% of consolidated gross profit • Cloud gross profit up 21% from last year • SaaS and Infrastructure-as-a-service, combined gross profit growth of 35% • Gross margin 15.3% • SG&A up 10% in U
Slide 13: Q4 2021 Year over Year Results
Q4 2021 Year over Year Results Net Sales Net Sales Gross Profit Gross Margin +12% YoY +12% YoY (in constant $**) +12% YoY Flat YoY $2.57B $2.57B $0.38B 15.0% 2020 2021 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj SG&A % of Net Sales* Adj EFO* Adj Diluted EPS* +10 bps YoY +10 bps YoY +12% Yo
Slide 14: FY 2021 Year over Year Results
FY 2021 Year over Year Results Net Sales Net Sales Gross Profit Gross Margin +13% YoY +13% YoY (in constant $**) +11% YoY -30 bps YoY $9.44B $9.44B $1.45B 15.3% 2020 2021 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj SG&A % of Net Sales* Adj EFO* Adj Diluted EPS* -30 bps YoY -20 bps YoY +12%
Slide 15: Q4 2021 North America | Financial Results
Q4 2021 North America | Financial Results Net Sales Gross Profit Gross Margin +13% YoY +13% YoY -10 bps YoY $2.09B $307M 14.7% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj SG&A % of Net Sales* Adj EFO* Sales Mix +10 bps YoY +10 bps YoY +9% YoY 14% 11.0% Hardware 10.6% $85M 16% Software 70%
Slide 16: Q4 2021 EMEA | Financial Results
Q4 2021 EMEA | Financial Results Net Sales Gross Profit Gross Margin +7% YoY (in constant $**) +10% YoY (in constant $**) +40 bps YoY $64M $0.43B 15.0% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix -10 bps YoY +27% YoY (in constant $**) 12% $13M Hardware 35% 12.0% Software 53%
Slide 17: Q4 2021 APAC | Financial Results
Q4 2021 APAC | Financial Results Net Sales Gross Profit Gross Margin +19% YoY (in constant $**) +22% YoY (in constant $**) +50 bps YoY $54M $14M 26.0% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix -70 bps YoY +37% YoY (in constant $**) $5M 27% Hardware 37% Software 17.5% Servi
Slide 18: Q4 2021 | Cash Flows and Cash Cycle
Q4 2021 | Cash Flows and Cash Cycle Net cash from operations Cash Conversion Cycle 0 days YoY 30 $164M 2020 2021 2020 2021 Days sales outstanding Days inventory outstanding Days purchases outstanding -3 days YoY +5 days YoY +2 days YoY 13 88 105 2020 2021 2020 2021 2020 2021 Insight Proprietary & Co
Slide 19: Liquidity and Debt Covenants
Liquidity and Debt Covenants Twelve Months Ended Fixed Charge Coverage Dec 31, 400,000 353,664 US Dollar in $000s 2021 2020 350,000 300,000 Adjusted Consolidated EBITDA: 250,000 Net Income $ 219,345 $ 172,640 200,000 Interest Expense 41,198 41,913 4.07x 150,000 Taxes 73,212 55,812 100,000 86,994 Dep
Slide 20: Full Year 2022 Outlook
Full Year 2022 Outlook • Adjusted diluted earnings per share* is expected to be between $7.65 and $7.85 per share for the full year 2022 • 2022 net sales expected to grow mid-single digits over prior year • Assumptions: • Interest expense between $30 and $35 million • Effective tax rate of 25% to 26
Slide 21: Appendix
Appendix 21 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. 21
Slide 22: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Twelve Months Ended Dec 31, Dec 31, US Dollar in $000s, except per share data 2021 2020 2021 2020 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 93,417 $ 83,042 $ 332,061 $ 271,575 Amortizat
Slide 23: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Twelve Months Ended Dec 31, Dec 31, US Dollar in $000s 2021 2020 2021 2020 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 76,504 $ 70,545 $ 268,813 $ 219,198 Amort
Slide 24: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Dec 31, US Dollar in $000s 2021 2020 Return on invested capital: GAAP consolidated EFO $ 332,061 $ 271,575 Other (1,634) 13,278 Adjusted non-GAAP consolidated EFO* 330,427 284,853 Income tax expense** 85
Slide 25: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Dec 31, US Dollar in $000s 2021 2020 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 289,855 $ 257,167 Less: Amorization of intangible assets (7,948)
Slide 26: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Dec 31, US Dollar in $000s 2021 2020 Adjusted North America Selling and Administrative Expenses: GAAP selling and administrative expenses $ 229,346 $ 200,364 Less: Amorization of intangible assets (7,347)
Slide 27: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes Insight’s policy elected for settlement of the convertible notes is principal/par value in cash with the excess being settled in shares resulting in dilution in GAAP reported Diluted Earnings Per Share (“DEPS”). The DEPS incremental shares for GAAP reporting purpo
Slide 28: Appendix - Convertible Senior Notes
Appendix - Convertible Senior Notes Insight Convertible Senior Notes - $350 Million Relevant NSIT stock prices: • Price at issuance - $51.56 • Conversion ratio price equivalent - $68.32 Triggered potential additional shares in GAAP DEPS* • Sales price conversion trigger - $88.82 • Bond hedge strike