Slide 1: Avnet Fiscal Third Quarter 2020 Financial Results
Avnet Fiscal Third Quarter 2020 Financial Results April 27, 2020
Slide 2: Safe harbor statement
Safe harbor statement This document contains certain “forw ard-looking statements” w ithin the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on management’s current expectations and are
Slide 3: Executive Overview
Executive Overview Bill Amelio Chief Executive Officer
Slide 4: Q3 FY20 Earnings
Q3 FY20 Earnings • Managing through COVID-19 outbreak • Q3 revenues and EPS were down QoQ and YoY • Quarterly results impacted by: • Softer demand, particularly in Asia • Softer pricing • Increased costs due to COVID-19 impacts on logistics • Q3 revenues in Americas and EMEA up QoQ • Acted quickly t
Slide 5: Electronic components business
Electronic components business • Revenues and operating margins down QoQ and YoY • Most notable impact in Asia: Chinese New Year and COVID-19 • Most distribution centers remained operational • Implemented business continuity plans to ensure employee safety • Experienced some longer lead times and de
Slide 6: Farnell: Scaling higher profit margin business
Farnell: Scaling higher profit margin business • Q3 sales and operating income margins were up slightly sequentially • Continued to execute on five-pronged plan, but ramping up new facility will be slower 6
Slide 7: FY20 priorities intact, but adapted near-term priorities
FY20 priorities intact, but adapted near-term priorities Scale Leverage higher profit ecosystem AMPLIFY businesses EXTEND for growth DRIVE LE Amplify SCALE Extend VERAGE Drive distribution digital continuous opportunities capabilities improvement Successful execution will add value for our customers
Slide 8: Third quarter results demonstrate Avnet's strengths
Third quarter results demonstrate Avnet’s strengths • Focus on employees’ safety while keeping business running efficiently • Resilience of business model; strength of counter-cyclical balance sheet • Flexibility to adapt quickly to changing market conditions • Success in activating global business
Slide 9: Financial Overview
Financial Overview Tom Liguori Chief Financial Officer
Slide 10: Avnet's role and near-term financial priorities
Avnet’s role and near-term financial priorities Critical role in the supply chain • Supply electronic components to 100+ countries • Stock inventory and ship components to customers • One-stop-shop for customers’ procurement staff • Give customers inventory and receivables financing Near-term financ
Slide 11: Q3 2020 Financial highlights
Q3 2020 Financial highlights $4.3B Revenues within original guidance ranges provided on January 23, 2020 12.0% Gross margin was higher than last quarter $449M Adjusted operating expenses(1) were higher than expected due to COVID-19 1.6% Adjusted operating margin(1), down 18bps from the previous quar
Slide 12: Key metrics by business segment and region
Key metrics by business segment and region Electronic • Revenues of $4.0B, down 5.5% sequentially and 8.2% YoY Components • Operating margins of 2.1% compared to 2.2% last quarter • Revenues of $1.2B, up 1.4% sequentially and down 7.2% YoY Americas • Revenues up sequentially despite current macro en
Slide 13: Q3 2020 Balance sheet and cash flow performance
Q3 2020 Balance sheet and cash flow performance $403M Cash $1.6B Debt 2.8 Gross debt leverage ratio at end of quarter 2.1 Net debt leverage ratio at end of quarter $37 Net book value / share, decrease sequentially due to impairment charge $29 Tangible book value / share $4B Working capital 13
Slide 14: Liquidity profile
Liquidity profile • $2B of cash and credit facilities to fund near to medium-term operations • Debt maturity dates are spread out over time • $300M Notes due in December 2021 • $350M Notes due in December 2022 • $550M Notes due in April 2026 • Cash flow from operations of $98M Lines of credit Credit
Slide 15: Actions to assure liquidity
Actions to assure liquidity • Continue to focus on managing inventories, receivables, and generating cash • Suspended buyback program as a result of the economic uncertainties • Paused M&A activities and curtailed non-essential outside services and hires • Implementing actions to manage our debt • $
Slide 16: Business outlook for Q4 FY20
Business outlook for Q4 FY20 (ending on June 27, 2020) • Not providing guidance for Q4 FY20 due to uncertainty of current environment • Current conditions are as follows: • Greater China is operational and appears to be recovering from COVID-19 • Southeast Asia, India, and Japan have areas where som
Slide 17: Q&A Session
Q&A Session
Slide 18: Thank you
Thank you AVNET
Slide 19: Non-GAAP Definitions
Non-GAAP Definitions In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles i n the United States (“GAAP”), the Company also discloses certain non-GAAP financial information including (i) adjusted operating income, (ii) adjusted op