Td Synnex Corporation · NYSE:SNX
Td Synnex — Q3 2022 Earnings Presentation
36 slides from Td Synnex's earnings presentation, Sep 27, 2022
Slide 1: Investor Presentation
Investor Presentation September 2022
Slide 2: Safe harbor statement
Safe harbor statement Statements in this presentation regarding TD SYNNEX Corporation which are not historical facts may be 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. These forward-looking stateme
Slide 3: TD SYNNEX merger: 1 year later
TD SYNNEX merger: 1 year later Created a leading distributor with TTM revenue of $62B Achieved 35% accretion to non-GAAP EPS, beating goal of 25% Realized optimization and cost synergy benefits of $140M, exceeding $100M goal for year 1 post-merger Increased quarterly dividend by 50% to $0.30 per sha
Slide 4: FQ3 results highlight strength of combined organization
FQ3 results highlight strength of combined organization Revenue of $15.4B, representing y/y growth of 15%(1), well above expectations and driven by robust demand in endpoint, datacenter infrastructure, and hyperscale infrastructure Non-GAAP operating income of $398M, up 15% y/y(2,3), driven by high
Slide 5: Strong FQ3 revenue growth and margin expansion
Strong FQ3 revenue growth and margin expansion Q3 FY22 B/(W) vs PY (2) Revenue ($B) $15.4 +7% / +15%(3) Operating Income ($M) $242 +3% Non-GAAP Operating Income ($M) (1) $398 +12% / +15%(4) Operating Margin 1.57% (-6 bps) Non-GAAP Operating Margin(1) 2.59% +12 bps Non-GAAP Earnings Per Share(1) $2.7
Slide 6: Robust organic growth across Core and High Growth
Robust organic growth across Core and High Growth 1 Adjusted revenue growth of +15% y/y(2,3), reflecting robust growth across all 3 regions as supply improved 2 Merger-related revenue recognition policy alignment headwind of ~$400M 43.6% 43.3% 3 Euro-related FX headwind of ~$700M(1) 41.7% 42.4% Q3 F
Slide 7: Recent Financial Results: Expanding revenue and profitability
Expanding revenueResults Recent Financial and profitability In $M (except EPS and net leverage) Combined LTM Net Sales and Y/Y Growth(1,4) % Combined LTM Non-GAAP OI(2,4) and % Margin(2,4) OI Conversion % (3) $60,325 $60,973 $60,623 $60,848 $60,690 $61,707 $57,493 40% 42% 41% 42% 42% 43% 38% $1,527
Slide 8: Q4 FY2022 outlook
Q4 FY2022 outlook Guidance Q4 FY22E Revenue (B) $15.2 – $16.2 Net Income (M) $138 – $177 Non-GAAP Net Income (M)(1) $259 – $298 Diluted EPS $1.44 – $1.84 Non-GAAP Diluted EPS(1) $2.70 – $3.10 Outstanding Diluted Weighted Avg. shares (Mil) 95.2 Net Total Interest Expense (M) ~$60 Tax Rate 24% • FY 20
Slide 9: Cost synergy attainment ahead of plan
Cost synergy attainment ahead of plan Year 1 Synergies Year 2 Targets IT Corporate, • Targeting an additional ~$60M in optimization and including taxes cost synergy benefits weighted toward SG&A and interest Synergies • Expect to complete Americas ERP migration project by September 2023, resulting i
Slide 10: Strong investment grade balance sheet
Strong investment grade balance sheet Significant liquidity Long dated, well-laddered capital structure ($M) Nov 2021 Aug 2022 Cash $995M $351M Unsecured revolver $3,500M $3,500M A/R securitization $1,500M $1,500M 3,500 Total liquidity $5,995M $5,351M Investment grade balance sheet with low costs –
Slide 11: Significant FCF potential with a focus on shareholder returns
Significant FCF potential with a focus on shareholder returns Medium-term target capital allocation $317M remaining stock buyback authorization in place on existing $400M Supplement organic program growth with strategic investments and M&A $83M stock repurchased 25% YTD in FY22, on track to exceed $
Slide 12: Key investment points
Key investment points Leading Global Provider of End-to-End Distribution, Systems Design & Integration Solutions for the IT Industry Business Levered to Secularly Growing IT Spend Increasing Focus on High-Growth Technologies, Growing Double-Digits at Accretive Margins Expect to generate >$1B of Free
Slide 13: Appendix
© TD SYNNEX Appendix
Slide 14: TD SYNNEX
TD SYNNEX Connecting the global IT system Software & cloud Security Endpoint / Hyperscale Edge infrastructure Converged Big Data & Analytics & hyper- AI/IoT/Software converged Service providers Data center DMs / ISVs System Consumer retailers integrators electronics VARs GLOBAL IT PLATFORMS SPECIALI
Slide 15: Our global strategy
Our global strategy Delivering higher value Invest Strengthen in high growth technologies our end-to-end portfolio AR/VR metaverse Customer portfolio Data (analytics, AI, IOT) Solutions portfolio Hybrid cloud Vendor portfolio Hyperscale infrastructure TaaS, recurring revenue models Mobility & Edge S
Slide 16: Solid track record of profitable growth
Solid track record of profitable growth COVID crisis Net revenue Global financial crisis +6% CAGR 60.6 61.7 56.308919 56.975571 50.902635 39.56528 39.592359 38.853884 38.974645 35.773298 36.01403 33.866402 31.07731 31.698543 30.601637 26.786726 28.361843 25.371686 2005 2006 2007 2008 2009 2010 2011
Slide 17: Highly variable cost structure provides flexibility in an economic downturn
Highly variable cost structure provides flexibility in an economic downturn Approximately 2/3 of total cash operating More than 90% of overall cost structure is COGS, which is expenses are estimated to be variable directly linked to revenue generation and variable in nature ~35% Fixed Opex COGS ~65%
Slide 18: 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 41 25 14 23 49 51 42 48 62 46 42 41 Zero (56) (59) (75) 2000 2001 2002 2003 2008 2009 2010 2019 2020 2021 (88) Opera
Slide 19: 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 diversity with 50% of our workforce based on our values of Inclusion, Target initiative (SBTi) Business and 40% of
Slide 20: Non-GAAP financial measures
Non-GAAP financial measures In addition to the financial results presented in accordance with GAAP, TD SYNNEX also uses adjusted selling, general and administrative expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP income before income taxes, non-GAAP provision for income taxe
Slide 21: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 21 21
Slide 22: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 22 22
Slide 23: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 23 23
Slide 24: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 24 24
Slide 25: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 25 25
Slide 26: Reconciliation of GAAP to non-GAAP financial measures
Reconciliation of GAAP to non-GAAP financial measures 26 26
Slide 27: Calculation of financial metrics
Calculation of financial metrics 27 27
Slide 28: Combined legacy SYNNEX and legacy Tech Data results
Combined legacy SYNNEX and legacy Tech Data results 28 28
Slide 29: Combined comparative results
Combined comparative results 29 29
Slide 30: Calculation of financial metrics – combined legacy SYNNEX and legacy Tech Data
Calculation of financial metrics – combined legacy SYNNEX and legacy Tech Data 30 30
Slide 31: TD SYNNEX results
TD SYNNEX results TD SYNNEX (Amounts in millions) (Amounts may not add due to rounding) Three Months Ended August 31, 2022 May 31, 2022 February 28, 2022 November 30, 2021 Net sales $ 15,356.1 $ 15,269.8 $ 15,470.0 $ 15,611.3 Cost of products sold (14,440.1) (14,314.0) (14,501.3) (14,668.1) Gross pr
Slide 32: Legacy SYNNEX results
Legacy SYNNEX results Net sales Cost of products sold Gross profit Operating expenses: Selling general and administrative expenses Acquisition, integration and restructuring expenses Operating income Adjustments Acquisition. integration and restructuring expenses Amortization of intangibles Stock-ba
Slide 33: Legacy Tech Data results
Legacy Tech Data results 33 33
Slide 34: Combined legacy SYNNEX and legacy Tech Data results
Combined legacy SYNNEX and legacy Tech Data results 34 34
Slide 35: Combined legacy SYNNEX and legacy Tech Data results
Combined legacy SYNNEX and legacy Tech Data results 35 35
Slide 36: THANK YOU
THANK YOU Liz Morali Investor Relations TD SYNNEX Corporation 510-668-8436 IR@tdsynnex.com IR website: ir.tdsynnex.com