Td Synnex Corporation · NYSE:SNX

Td Synnex — Q3 2023 Earnings Presentation

40 slides from Td Synnex's earnings presentation, Sep 26, 2023

1. Slide 1: Investor Presentation

   Investor Presentation September 2023

2. Slide 2: Safe harbor statement

   Safe harbor statement Statements in this presentation regarding TD SYNNEX that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are inheren

3. Slide 3: FQ3: Margin expansion with EPS above expectations, strong cash flow

   FQ3: Margin expansion with EPS above expectations, strong cash flow and increased return to shareholders Revenue of $14.0B and non-GAAP gross billings(1) of $18.6B, both at the midpoint of the previously provided outlook range, and non-GAAP EPS(1) of $2.78, above outlook range Expanded non-GAAP gros

4. Slide 4: FQ3: Broad portfolio and shift to High-Growth areas boosted margins

   FQ3: Broad portfolio and shift to High-Growth areas boosted margins Q3 FY23 B/(W) vs PY Revenue ($B) $14.0 (9)% / (10)%(2) Non-GAAP gross billings ($B)(1) $18.6 (7)% / (8)%(2) Operating income ($M) $240 (1)% Non-GAAP operating income ($M)(1) $397 0% / (1)%(2) Operating margin 1.72% +15 bps Non-GAAP

5. Slide 5: Recent Financial Results

   Solid and consistent margins, Recent Financial Results cash flow generation improving net leverage ratio In $M (except EPS and net leverage) Combined LTM Revenue and Y/Y Growth(1,4) % Combined LTM Non-GAAP OI(2,4) and % Margin(2,4) OI Conversion % (3) 43.6 % 9.2% 6.3% 5.5 6.3% 5.5% 2.9% % 42.2 2.9%

6. Slide 6: Q4 FY 2023 Outlook

   Q4 FY 2023 Outlook Guidance Q4 FY23E Revenue (B) $14.0 – $15.0 Non-GAAP gross billings (B)(1) $18.5 – $19.7 Net income (M) $116 – $162 Non-GAAP net income (M)(1) $223 – $269 Diluted EPS $1.25 – $1.75 Non-GAAP diluted EPS(1) $2.40 – $2.90 Outstanding diluted weighted avg. shares (M) 91.9 Interest exp

7. Slide 7: Strong investment grade balance sheet

   Strong investment grade balance sheet Significant liquidity Long dated, well-laddered capital structure ($M) Nov 2022 Aug 2023 Cash $523M $1,251M Unsecured revolver $3,500M $3,500M A/R securitization $1,500M $1,500M Total liquidity $5,523M $6,251M Investment grade balance sheet with low costs – FQ3’

8. Slide 8: Significant FCF potential with a focus on shareholder returns

   Significant FCF potential with a focus on shareholder returns Medium-term target capital allocation $278M of stock repurchased YTD in Supplement organic FY2023 growth with strategic investments and M&A ~$740M remaining stock buyback authorization in Optimize cost of capital place on existing $1B and

9. Slide 9: Why own TD SYNNEX?

   Why own TD SYNNEX? Attractive core business Significant cash flow engine Target shareholder return of capitalizing on high-growth creates financial flexibility 15-20% technologies Industry leader levered to secular IT Strong investment grade balance Target TSR of 15-20% spending growth sheet in medi

10. Slide 10: A differentiated investment opportunity

    A differentiated investment opportunity Leading Global IT Solutions Distributor with Significant Breadth and Depth 1 of Capabilities 2 Portfolio Squarely Aligned with Technology Megatrends, Driving Growth and Margin Uplift Central Role in IT Ecosystem Positions Us Well for Future Models of 3 Consump

11. Slide 11: Appendix

    © TD SYNNEX Appendix

12. Slide 12: TD SYNNEX

    TD SYNNEX Connecting the global IT system GLOBAL IT PLATFORMS SPECIALIZED SKILLS 12

13. Slide 13: Well positioned to benefit from industry evolution

    Well positioned to benefit from industry evolution 13

14. Slide 14: Attractive business model with variable cost structure and limited capital intensity

    Attractive business model with variable cost structure and limited capital intensity TTM Adj. EBITDA less Capex Illustrative Business Model Highly Variable Cost Structure ($M)(1) 92% conversion OEM COGS >95% $1,814 ~2% Back-end Opex $1,668 $960 $20 <5% Margin $(146) ~4% Front- end Margin ~65% Variab

15. Slide 15: Stable cash conversion cycle with countercyclical benefits

    Stable cash conversion cycle with countercyclical benefits Steady cash conversion cycle (days) Countercyclical cash generation Dot com bubble Global financial crisis COVID-19 pandemic 25 14 23 23 Zero Operating cash flow During recessionary environments when revenues decline, DSO DIO DPO balance she

16. Slide 16: Recent partner awards

    © TD SYNNEX Recent partner awards (J Alibaba Cloud 7sus' aws cow) valli. COHESITY LTechnologies few De@LLTechnologies O | Gl v E Extreme F:2 RATINET. HPE3o@2° Hewlett Packard @ intel EE Microsoft FINetApp ~y NUTAND<. @ paloalto’ Ruckus SAMSUNG SEAL SHIELD” veeaAm 16

17. Slide 17: ESG highlights

    ESG highlights Environmental Social Governance Company • Helping to build a healthier planet • Seeking to increase our gender • Strong corporate governance • Committed to Science-Based Target diversity with 50% of our workforce based on our values of Inclusion, initiative (SBTi) Business Ambition an

18. Slide 18: Non-GAAP financial measures

    Non-GAAP financial measures In addition to the financial results presented in accordance with GAAP, TD SYNNEX refers to revenues on a constant currency basis which adjusts for the translation effect of foreign currencies so that certain financial results can be viewed without the impact of fluctuati

19. Slide 19: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Consolidated Americas Europe Asia-Pacific and Japan August 31, August 31, August 31, August 31, August 31, August 31, August 31, August 31, Reve

20. Slide 20: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP gross billings in constant currency August 31, 2023 August 31, 2022 Revenue $ 13,960,615 $ 15,356,085 Costs incurred and netted against

21. Slide 21: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Gross profit and gross margin August 31, 2023 August 31, 2022 Revenue $ 13,960,615 $ 15,356,085 Gross profit $ 971,273 $ 916,030 Purchase accoun

22. Slide 22: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Consolidated Americas Europe Asia-Pacific and Japan August 31, August 31, August 31, August 31, August 31, August 31, August 31, August 31, Oper

23. Slide 23: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP operating income in constant currency August 31, 2023 August 31, 2022 Operating income $ 240,233 $ 241,534 Acquisition, integration and

24. Slide 24: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Free cash flow August 31, 2023 Net cash provided by operating activities $ 591,955 Purchases of property and equipment (39,808) Free cash flow $

25. Slide 25: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Non-GAAP interest expense August 31, 2023 Interest expense, net $ 67,703 Acquisition and integration interest costs (2,311) Non-GAAP interest ex

26. Slide 26: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Three Months Ended Income before income taxes, provision for income taxes and effective tax rate August 31, 2023 Income before income taxes $ 170,159 Acquisition,

27. Slide 27: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Per share amounts) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, August 31, May 31, February 28, November 30, August 31, May 31, February 28, November 30, 2

28. Slide 28: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Per share amounts) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, August 31, 2023 2022 Diluted EPS $ 1.49 $ 1.55 Acquisition, integration & restructuring costs 0.79 0.50 Amortization of intan

29. Slide 29: Calculation of financial metrics

    Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) August 31, 2023 ROIC Operating income (trailing fiscal four quarters) $ 1,125,440 Income taxes on operating income(1) (228,334) Operating income after taxes $ 897,106 Total invested ca

30. Slide 30: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in millions, except per share amounts) (Amounts may not add or compute due to rounding) Forecast Three Months Ending November 30, 2023 Net income and diluted EPS Low High Net income $ 116 $ 162 Acquisition, integration and res

31. Slide 31: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Forecast Three Months Ending Non-GAAP interest expense November 30, 2023 Interest expense, net $ 71 Acquisition and integration interest costs 1 Non-GAAP interest e

32. Slide 32: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Amounts may not add or compute due to rounding) Forecast Three Months Ending (Currency in billions) November 30, 2023 Non-GAAP gross billings Low High Revenue $ 14.0 $ 15.0 Costs incurred and netted against revenue related to sales of

33. Slide 33: Calculation of financial metrics

    Calculation of financial metrics TD SYNNEX (Currency in thousands) (Amounts may not add or compute due to rounding) Leverage ratio August 31, 2023 May 31, 2023 February 28, 2023 November 30, 2022 Total borrowings (a) $ 4,079,182 $ 4,105,112 $ 4,388,723 $ 4,103,793 Less: cash and cash equivalents (b)

34. Slide 34: TD SYNNEX results

    TD SYNNEX results TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, August 31, May 31, February 28, November 30, 2023 2023 2023 2022 2022 2022 2022 2021 Revenue $ 13,960.6 $ 14,062.1 $ 15,125.4 $ 16,248.0

35. Slide 35: Legacy SYNNEX results

    Legacy SYNNEX results SYNNEX CORPORATION (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, 2021 2021 2021 2020 Revenue $ 5,207.1 $ 5,856.8 $ 4,939.0 $ 6,118.8 Cost of revenue (4,894.4) (5,527.7) (4,634.

36. Slide 36: Legacy Tech Data results

    Legacy Tech Data results TIGER PARENT (AP) CORPORATION AND SUBSIDIARIES HISTORICAL FINANCIAL INFORMATION (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, 2021 2021 2021 2020 Revenue $ 9,132.1 $ 9,570.6

37. Slide 37: Combined legacy SYNNEX and legacy Tech Data results

    Combined legacy SYNNEX and legacy Tech Data results Combined (Legacy SYNNEX and Legacy Tech Data) (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Three Months Ended August 31, May 31, February 28, November 30, 2021 2021 2021 2020 Revenue $ 14,339.2 $ 15,427.4 $ 15

38. Slide 38: Combined legacy SYNNEX and legacy Tech Data results

    Combined legacy SYNNEX and legacy Tech Data results Combined (Legacy SYNNEX and Legacy Tech Data) (Currency in millions) (Unaudited) (Amounts may not add or compute due to rounding) Trailing Twelve Months for Periods Ended August 31, May 31, February 28, November 30, August 31, May 31, February 28,

39. Slide 39: Reconciliation of GAAP to non-GAAP financial measures

    Reconciliation of GAAP to non-GAAP financial measures TD SYNNEX (Currency in millions) (Amounts may not add or compute due to rounding) Trailing Twelve Months for Period Ended August 31, Adjusted EBITDA less Capex 2023 Operating income $ 1,125.5 Adjustments Acquisition, integration and restructuring

40. Slide 40: THANK YOU

    THANK YOU Liz Morali Investor Relations TD SYNNEX Corporation 510-668-8436 IR@tdsynnex.com IR website: ir.tdsynnex.com

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