Slide 1: Insight Enterprises, Inc. Second Quarter 2021 Earnings Conference Call and Webcast
Insight Enterprises, Inc. Second Quarter 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 • Second Quarter 2021 Highlights • Emerging Technology: Artificial Intelligence and Computer Vision • Diverse Solutions Offerings • Business and Leadership Recognitions • CFO Commentary • Second Quarter 2021 Financial Highlights by Region • Cashflow and Debt Cov
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: Second Quarter 2021 Highlights and Expectations
Second Quarter 2021 Highlights and Expectations • Double digit top line growth across all major categories of net sales • Gross margin 16.4% • GAAP EFO up 19% from last year • Adjusted EFO* up 6% from last year • Adjusted return on invested capital* 13.6%, up from 12.1% last year • Hardware booking
Slide 5: Artificial Intelligence
Artificial Intelligence Building Smarter, Safer Workplaces When organizations leverage artificial intelligence (AI) and machine learning, they gain access to new insights — and the ability to act upon them more quickly and strategically. Computer vision, a type of AI, expands visibility, so organiza
Slide 6: Computer Vision at Work
Computer Vision at Work Image acquisition Image processing Image understanding An image is captured as a The image is adjusted to a size The image is analyzed for matrix of pixels — each and format that can be predetermined patterns with a numerical value. interpreted by the CV algorithm. which can
Slide 7: Computer Vision Delivers Value
Computer Vision Delivers Value Employee safety Inspection & compliance Detect people and/or equipment Automate routine asset evaluation entering danger zones. especially in remote locations while reducing human error. Security Process optimization Detect people entering unauthorized Use Optical Char
Slide 8: Diverse Solutions Offerings
Diverse Solutions Offerings Multi-phased solutions create meaningful experiences that help businesses run smarter. Digital Innovation Cloud + Data Center Connected Workforce Transformation Supply Chain Optimization Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct
Slide 9: Insight Business Recognitions
Insight Business Recognitions • #360 on the Fortune 500 rankings for 2021 – improved 49 spots • One of 11 providers globally to be recognized in the Gartner Magic Quadrant for Software Asset Management Managed Services • Earned four of Microsoft’s most prestigious awards after a record-setting year:
Slide 10: Insight Leadership Recognitions
Insight Leadership Recognitions Insight’s values of Hunger, Heart, and Harmony are core to how our teammates treat one another, engage with those we work with every day, and improve the communities where we work and live. • CFO • Named to The Top 100 Women Leaders in Technology of 2021 by Women We A
Slide 11: CFO Commentary
CFO Commentary • Second Quarter 2021 Financial Highlights by Region • Cashflow and Debt Covenants • 2021 Outlook Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 11
Slide 12: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights • Net Sales of $2.2 billion • Gross margin 16.4% • SG&A up 10.5% year over year in constant currency, up 14.2% in US dollars • 12.4% - GAAP SG&A as a percent of net sales • 12.1% - Adjusted SG&A as a percent of net sales* • GAAP EFO of $88 million • Adjusted EFO* of $9
Slide 13: Q2 2021 Year over Year Results
Q2 2021 Year over Year Results Net Sales Net Sales Gross Profit Gross Margin +13% YoY +10% YoY (in constant $**) +13% YoY -10 bps YoY $2.23B $0.37B 16.4% $2.23B 2020 2021 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adjusted SG&A* % of Net Sales Adj EFO* Adj Diluted EPS* +10 bps YoY +30 bps YoY
Slide 14: Q2 2021 North America | Financial Results
Q2 2021 North America | Financial Results Net Sales Gross Profit Gross Margin +14% YoY +14% YoY -10 bps YoY $1.76B $279M 15.8% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adjusted SG&A % of Net Sales Adj EFO* Sales Mix 0 bps YoY +10 bps YoY +8% YoY 15% $72M Hardware 12.2% 11.7% 19% Software 66
Slide 15: Q2 2021 EMEA | Financial Results
Q2 2021 EMEA | Financial Results Net Sales Gross Profit Gross Margin -4% YoY (in constant $**) -3% YoY (in constant $**) +20 bps YoY 17.6% $0.42B $74M 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix +60 bps YoY -11% YoY (in constant $**) 15% 12.9% Hardware 41% Software $20M Serv
Slide 16: Q2 2021 APAC | Financial Results
Q2 2021 APAC | Financial Results Net Sales Gross Profit Gross Margin +24% YoY (in constant $**) +11% YoY (in constant $**) -290 bps YoY $52M $14M 27.2% 2020 2021 2020 2021 2020 2021 SG&A % of Net Sales Adj EFO* Sales Mix -130 bps YoY +6% YoY (in constant $**) $5M 22% Hardware 37% Software 17.6% Serv
Slide 17: Q2 2021 | Cash Flows and Cash Cycle
Q2 2021 | Cash Flows and Cash Cycle Net cash from operations Cash Conversion Cycle +12 days YoY 34 $5M 2020 2021 2020 2021 Days sales outstanding Days inventory outstanding Days purchases outstanding 0 days YoY -1 days YoY -13 days YoY 124 11 101 2020 2021 2020 2021 2020 2021 Insight Proprietary & C
Slide 18: Liquidity and Debt Covenants
Liquidity and Debt Covenants Twelve Months Ended Fixed Charge Coverage Jun 30, 400,000 US Dollar in $000s 2021 2020 346,886 350,000 Adjusted Consolidated EBITDA: 300,000 Net Income $ 194,023 $ 150,428 250,000 Interest Expense 39,495 42,370 200,000 Taxes 64,165 47,887 4.47x 150,000 Depreciation and a
Slide 19: Full Year 2021 Outlook
Full Year 2021 Outlook • 2021 net sales expected to grow between 4% and 8%, with a bias toward the high-end • Adjusted diluted earnings per share* is expected to be between $6.75 and $6.90 per share for the full year 2021 • Includes expected $0.06 impact from share repurchases made in second quarter
Slide 20: Appendix
Appendix 20 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. 20
Slide 21: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* Three Months Ended Six Months Ended Jun 30, Jun 30, US Dollar in $000s, except per share data 2021 2020 2021 2020 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 88,469 $ 74,188 $ 155,493 $ 127,051 Amortization
Slide 22: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures* (continued) Three Months Ended Six Months Ended Jun 30, Jun 30, US Dollar in $000s 2021 2020 2021 2020 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 64,119 $ 52,068 $ 118,040 $ 94,409 Amortizat
Slide 23: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Twelve Months Ended Jun 30, US Dollar in $000s 2021 2020 Return on invested capital: GAAP consolidated EFO $ 300,017 $ 238,489 Other (3,566) 25,286 Adjusted non-GAAP consolidated EFO* 296,451 263,775 Income tax expense** 77
Slide 24: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Jun 30, US Dollar in $000s 2021 2020 Adjusted Consolidated Selling and Administrative Expenses: GAAP selling and administrative expenses $ 277,087 $ 242,580 Less: Amorization of intangible assets (8,068)
Slide 25: 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 26: 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