Tech Data — Q1 FY2020 Earnings Presentation
29 slides from Tech Data's earnings presentation, May 30, 2019
Slide 1: Q1 Fiscal Year 2020 Financial Highlights
Q1 Fiscal Year 2020 Financial Highlights For the quarter ended April 30, 2019 May 30, 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this communication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, including statements regarding Tech Data’s plans, objectives, expectations and intentions, Tech D
Slide 3: Worldwide Net Sales
Worldwide Net Sales $ in Billions Q1 FY20: $10.5 • Worldwide reported net sales of $8.4 billion $9.3 3% $8.9 decreased 2% compared to the prior-year quarter. $8.5 3% $8.4 3% 3% 4% 41% • On a constant currency basis, net sales increased 3% 44% 46% compared to the prior-year quarter. Asia Pacific 42%
Slide 4: Worldwide Gross Profit and Margin
Worldwide Gross Profit and Margin $ in Millions Q1 FY20: • Gross profit of $509.4 million decreased 3% compared to the prior-year quarter and increased 2% on a constant currency basis. • Gross margin declined 6 basis points compared to the prior-year quarter. 4
Slide 5: Worldwide SG&A Expenses
Worldwide SG&A Expenses $ in Millions Q1 FY20: • Non-GAAP SG&A expenses of $384.6 million decreased 4% compared to the prior-year quarter and increased 1% on a constant currency basis. • Non-GAAP SG&A as a percentage of net sales improved 9 basis points compared to the prior-year quarter. • GAAP dep
Slide 6: Worldwide Operating Income
Worldwide Operating Income $ in Millions Q1 FY20: • Worldwide non-GAAP operating income of $124.8 million increased 1% compared to the prior-year quarter, and 4% on a constant currency basis. • Worldwide non-GAAP operating margin improved 3 basis points from the prior-year quarter. (1) See the GAAP
Slide 7: Worldwide Net Income and EPS
Worldwide Net Income and EPS Q1 FY20: $ in Millions (except EPS) • The effective tax rate was 23%, compared to 21% in the prior-year quarter. The non-GAAP effective tax rate was 23%, compared to 26% in the prior-year quarter. • Non-GAAP net income of $75.9 million increased 7% compared to the prior-
Slide 8: Regional Results - Americas Net Sales
Regional Results - Americas Net Sales $ in Billions $4.2 Q1 FY20: $4.0 $4.1 $3.8 $3.6 • Americas’ reported net sales were $3.8 billion, an increase of 5% compared to the prior-year quarter. • On a constant currency basis, net sales increased 6% compared to the prior-year quarter. Q1 FY19 Q2 FY19 Q3
Slide 9: Regional Results - Americas Operating Income
Regional Results - Americas Operating Income (1) $ in Millions Q1 FY20: • Americas’ non-GAAP operating income of $84.7 million decreased 1% compared to the prior-year quarter, as well as on a constant currency basis. • Non-GAAP operating margin declined 14 basis points over the prior-year quarter. (
Slide 10: Regional Results - Europe Net Sales
Regional Results - Europe Net Sales $ in Billions Q1 FY20: $5.9 • Europe’s reported net sales were $4.3 billion, $4.9 $4.7 $4.5 a decline of 8% compared to the prior-year $4.3 quarter. • On a constant currency basis, net sales increased 1% compared to the prior-year quarter. Q1 FY19 Q2 FY19 Q3 FY19
Slide 11: Regional Results - Europe Operating Income
Regional Results - Europe Operating Income (1) $ in Millions Q1 FY20: • Europe’s non-GAAP operating income of $45.6 million increased 4% compared to the prior-year quarter, and 14% on a constant currency basis. • Non-GAAP operating margin improved 12 basis points from the prior-year quarter. (1) Bef
Slide 12: Regional Results - Asia Pacific Net Sales
Regional Results - Asia Pacific Net Sales $ in Billions Q1 FY20: $0.33 $0.31 $0.29 • Asia Pacific reported net sales were $0.31 $0.28 $0.27 billion, an increase of 15% compared to the prior-year quarter. • On a constant currency basis, net sales increased 19% compared to the prior-year quarter. Q1 F
Slide 13: Regional Results - Asia Pacific Operating Income
Regional Results - Asia Pacific Operating Income (1, 3) $ in Millions Q1 FY20: • The Asia Pacific region’s non-GAAP operating income of $2.8 million increased 161% compared to the prior-year quarter, and 163% on a constant currency basis. • Non-GAAP operating margin improved 51 basis points from the
Slide 14: Worldwide Cash Metrics
Worldwide Cash Metrics Cash Flow from Operations Cash Conversion Cycle $ in Millions Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Days of Sales 56 53 58 54 59 Outstanding Days of Supply 33 33 33 31 38 Days of Purchases (65) (68) (73) (70) (78) Outstanding Cash Conversion 24 18 18 15 19 Cycle Q1 FY20: • N
Slide 15: Worldwide Balance Sheet Highlights
Worldwide Balance Sheet Highlights Q1 FY20: • Accumulated other comprehensive income was $3 million. • Capital expenditures were $15 million. • At April 30, 2019, the company had $2.9 billion of equity, and 36.76 million shares outstanding resulting in book value of $79.32 per share. • At April 30,
Slide 16: Worldwide Return on Invested Capital
Worldwide Return on Invested Capital • Company’s Weighted Average Cost of Capital is approximately 9%. • Adjusted return on invested capital in Q1 FY20 TTM (trailing twelve months) was 14% compared to 11% in the prior-year quarter. (1) See reconciliation of ROIC to adjusted ROIC calculation in appen
Slide 17: Worldwide Share Repurchase Activity
Worldwide Share Repurchase Activity Number of Amount Shares Average Repurchased Repurchased Price Per ($ millions) Share (millions) Q1 FY20 Share Repurchases $36 0.346 $103.15 Amount remaining on current authorization $157 million 17
Slide 18: Business Outlook
Business Outlook Forward-Looking Statements For the quarter ending July 31, 2019 Certain statements made in this document are “Forward-Looking Statements” as described in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties further described i
Slide 19: Appendix: GAAP to Non-GAAP Reconciliations
APPENDIX GAAP to Non-GAAP Reconciliations 19
Slide 20: SG&A
SG&A $ in thousands Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Net Sales $ 8,548,319 $ 8,886,101 $ 9,340,029 $ 10,464,501 $ 8,406,424 SG&A Expenses (GAAP) $ 422,361 $ 415,319 $ 396,675 $ 414,540 $ 405,816 Tax indemnifications - (554) (5,541) (3,539) (320) Acquisition-related intangible assets amortizat
Slide 21: Operating Income Q1 FY20
Operating Income Q1 FY20 (In thousands) Q1 FY20 Stock Americas (1) Europe (1) Asia Pacific (1) Compensation Consolidated Expense Net Sales $ 3,789,198 $ 4,309,500 $ 307,726 $ 8,406,424 Operating income (GAAP) (1) $ 68,633 $ 36,420 $ 876 $ (8,305) $ 97,624 Acquisition, integration and restructuring 2
Slide 22: Operating Income Q4 FY19
Operating Income Q4 FY19 (In thousands) Q4 FY19 Stock Americas (1) Europe (1) Asia Pacific (1) Compensation Consolidated Expense Net Sales $ 4,241,714 $ 5,895,072 $ 327,715 $ 10,464,501 Operating income (GAAP) (1) $ 104,966 $ 109,083 $ (40,177) $ (7,819) $ 166,053 Acquisition, integration and restru
Slide 23: Operating Income Q3 FY19
Operating Income Q3 FY19 (In thousands) Q3 FY19 Stock Americas (1) Europe (1) Asia Pacific (1) Compensation Consolidated Expense Net Sales $ 4,137,852 $ 4,920,156 $ 282,021 $ 9,340,029 Operating income (GAAP) (1) $ 112,399 $ 39,889 $ 2,739 $ (8,139) $ 146,888 Acquisition, integration and restructuri
Slide 24: Operating Income Q2 FY19
Operating Income Q2 FY19 (In thousands) Q2 FY19 Stock Americas (1) Europe (1) Asia Pacific (1) Compensation Consolidated Expense Net Sales $ 4,043,331 $ 4,549,127 $ 293,643 $ 8,886,101 Operating income (GAAP) (1) $ 87,930 $ 29,085 $ 1,318 $ (7,968) $ 110,365 Acquisition, integration and restructurin
Slide 25: Operating Income Q1 FY19
Operating Income Q1 FY19 (In thousands) Q1 FY19 Stock Americas (1) Europe (1) Asia Pacific (1) Compensation Consolidated Expense Net Sales $ 3,618,206 $ 4,661,702 $ 268,411 $ 8,548,319 Operating income (GAAP) (1) $ 61,342 $ 17,318 $ (577) $ (7,587) $ 70,496 Acquisition, integration and restructuring
Slide 26: Net Income and EPS
Net Income and EPS (In thousands, except per Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 share data) Net Income Diluted EPS Net Income Diluted EPS Net Income Diluted EPS Net Income Diluted EPS Net Income Diluted EPS GAAP Results $33,699 $0.87 $75,866 $1.97 $114,216 $2.96 $116,799 $3.11 $55,400 $1.49 Acq
Slide 27: Return on Invested Capital
Return on Invested Capital $ in thousands Twelve months ended April 30, TTM Net Operating Profit After Tax (NOPAT)*: 2018 2019 Operating income $ 405,497 $ 520,930 Income taxes on operating income (1) (242,229) (52,272) NOPAT $ 163,268 $ 468,658 Average Invested Capital: Short-term debt (5-qtr end a
Slide 28: Adjusted Return on Invested Capital
Adjusted Return on Invested Capital $ in thousands Twelve months ended April 30, TTM Net Operating Profit After Tax (NOPAT), as adjusted*: 2018 2019 Non-GAAP operating income (1) $ 603,559 $ 708,588 Income taxes on non-GAAP operating income (2) (178,518) (179,283) NOPAT, as adjusted $ 425,041 $ 529,
Slide 29: Guidance Reconciliation
Guidance Reconciliation Three months ending July 31, 2019 Low end of High end of guidance range guidance range Earnings per share - diluted $1.53 $1.83 Acquisition, integration and restructuring expenses 0.59 0.59 Acquisition-related amortization of intangibles 0.24 0.24 Income tax effect of the abo