Insight Enterprises, Inc. · NASDAQ:NSIT
Insight Enterprises — Q3 2020 Earnings Presentation
19 slides from Insight Enterprises's earnings presentation, Nov 3, 2020
Slide 1: Insight Enterprises, Inc. Third Quarter 2020 Earnings Conference Call and Webcast
Exhibit 99.2 Insight Enterprises, Inc. Third Quarter 2020 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 • Financial Highlights and Results • Operating Highlights • Current Environment • CFO Commentary • Year to Date Highlights • Cashflow and Debt Covenants • Financial Results by Region • Taxes and Cash Flow • Closing Comments Insight Proprietary & Confidential. Do
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: Q3 2020 Financial Highlights
Q3 2020 Financial Highlights • Resilient business model, strong execution, delivered on financial commitments • +38% - GAAP Earnings from operations growth (YOY) • +22% - Adjusted Earnings from operations growth* (YOY) • 15.9% - Third quarter record gross margins • +45% - GAAP Diluted Earnings per S
Slide 5: Q3 2020 Year over Year Results
Q3 2020 Year over Year Results Net Sales Gross Profit Gross Margin +1% YoY +11% YoY +150 bps YoY $1.94B 15.9% $0.31B 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Adj Diluted EPS* +100 bps YoY +22% YoY +25% YoY $72M $1.38 12.7% 2019 2020 2019 2020 2019 2020 GAAP Earnings from operations
Slide 6: Third Quarter Operating Highlights
Third Quarter Operating Highlights • PCM Integration ahead of plan - Expect ~$60-$65 million in annualized run- rate cost savings by year end • Investing in sales and technical talent • Organizational updates • North America hardware booking trends improved double digits sequentially in the third qu
Slide 7: Current Environment
Current Environment • Markets open in limited capacity across geos • Demand for solutions as economy recovers • Solution Areas • Partner Recognition • NetApp 2020 Cloud Innovation Partner of the Year • Dell Technologies 2019 Transformation Partner of the Year • Named to Forbes World’s Best Employers
Slide 8: CFO Commentary
CFO Commentary • Year to Date Highlights • Cashflow and Debt Covenants • Q3-2020 Financial Results by Region • Taxes and Cash Flow Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA, Inc. All Rights Reserved. 8
Slide 9: Nine months ended September 30, 2020 | Highlights
Nine months ended September 30, 2020 | Highlights • PCM Integration ahead of Plan – Synergies of $60-$65M annual run rate by year end • Gross Margins up more than 100 basis points year over year • Cost reduction initiatives and integration plans • Adjusted earnings from operations growth of 15% year
Slide 10: Liquidity and Debt Covenants
Liquidity and Debt Covenants Twelve Months Ended Fixed Charge Coverage Sep 30, 283,242 300,000 US Dollar in $000s 2020 2019 250,000 Adjusted Consolidated EBITDA: Net Income $ 162,202 $ 163,498 200,000 Interest Expense 43,469 23,074 150,000 Taxes 49,912 47,353 3.99x Depreciation 28,852 21,209 100,000
Slide 11: Q3 2020 North America | Financial Results
Q3 2020 North America | Financial Results Net Sales Gross Profit Gross Margin +3% YoY +13% YoY +150 bps YoY 15.9% $1.56B $247M 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix +100 bps YoY +20% YoY 14% 12.3% $64M Hardware 20% Software 66% Services 2019 2020 2019 2020 GAAP Earning
Slide 12: Q3 2020 EMEA | Financial Results
Q3 2020 EMEA | Financial Results Net Sales Gross Profit Gross Margin -8% YoY (in constant $**) +0% YoY (in constant $**) +120 bps YoY $50M 14.7% $0.34B 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix +80 bps YoY +53% YoY (in constant $**) 11% 13.3% $5M Hardware 41% Software 48%
Slide 13: Q3 2020 APAC | Financial Results
Q3 2020 APAC | Financial Results Net Sales Gross Profit Gross Margin -13% YoY (in constant $**) +2% YoY (in constant $**) +410 bps YoY 27.3% $10M $37M 2019 2020 2019 2020 2019 2020 SG&A % of Net Sales Adj EFO* Sales Mix +240 bps YoY +19% YoY (in constant $**) 20.8% 17% $3M Hardware 39% Software 44%
Slide 14: Q3 2020 | Cash Flows and Cash Cycle
Q3 2020 | Cash Flows and Cash Cycle Net cash from operations Adj Free Cash Flow* Cash Conversion Cycle -17 days YoY $556M $462M 42 $55 25 $169 2019 2020 2019 2020 2019 2020 Days sales outstanding Days inventory outstanding Days purchases outstanding -3 days YoY -1 days YoY +13 days YoY 111 11 10 93
Slide 15: Q4 and Full Year 2020 Outlook
Q4 and Full Year 2020 Outlook • Fourth quarter 2020 net sales are expected to be between $2.1 and $2.2 billion and Adjusted diluted earnings per share are expected to be between $1.45 and $1.55. • Full year 2020 net sales are expected to be between $8.1 and $8.2 billion and Adjusted diluted earnings
Slide 16: Closing Commentary
Closing Commentary Manage Today Transform Tomorrow Clients Suppliers Supply Connected Workforce Cloud + Data Center Digital Innovation Chain Optimization Transformation Product- Outcome- focused based CapEx OpEx Insight Proprietary & Confidential. Do Not Copy or Distribute. © 2019 Insight Direct USA
Slide 17: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended Nine Months Ended Sep 30, Sep 30, US Dollar in $000s, except per share data 2020 2019 2020 2019 Adjusted Consolidated Earnings from Operations: GAAP consolidated EFO $ 61,482 $ 44,422 $ 188,533 $ 173,578 Severance an
Slide 18: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Three Months Ended Nine Months Ended Sep 30, Sep 30, US Dollar in $000s 2020 2019 2020 2019 Adjusted North America Earnings from Operations: GAAP EFO from North America segment $ 54,244 $ 39,306 $ 148,653 $ 135,550 Severanc
Slide 19: Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued)
Appendix – Reconciliation of GAAP to Non-GAAP Financial Measures (continued) Nine Months Ended Sep 30, US Dollar in $000s 2020 2019 Adjusted Free Cash Flow: Net cash provided by operating activities $ 462,094 $ 168,595 Purchases of property and equipment (20,688) (16,922) Net repayments under invent