Slide 1: Q1 2023 Earnings
A GARMIN. Q1 2023 Earnings May 3, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials include projections and other forward-looking statements regarding Garmin Ltd. and its business that are commonly identified by words such as “anticipates,” “would,” “may,” “expects,” “estimates,” “plans,” “intends,” “projects,” and other words or phrases with s
Slide 3: Business Update
Business Update Cliff Pemble President and CEO
Slide 4: Consolidated results
Consolidated Revenue Operating income Operating margin Q1 2023 $1.15B $197M 17.2% 2% y/y decline 14% y/y decline BUSINESS INSIGHTS • Solid performance to start the year • Four segments with double-digit revenue growth • Maintaining 2023 guidance
Slide 5: Fitness
Fitness Revenue Operating income Operating margin Q1 2023 $245M $11M 4% 11% y/y growth SEGMENT INSIGHTS • Revenue growth driven primarily by advanced wearables • Strength in running watches introduced during the past year • Launched Forerunner 265 and Forerunner 965, our first running watches with a
Slide 6: Outdoor
Outdoor Revenue Operating income Operating margin Q1 2023 $329M $77M 23% 27% y/y decline SEGMENT INSIGHTS • Revenue decline primarily driven by adventure watches as they compare against strong first quarter 2022 launches • fēnix 7 adventure watches will be worn on the Polaris Dawn spaceflight missio
Slide 7: Aviation
Aviation Revenue Operating income Operating margin Q1 2023 $214M $58M 27% 22% y/y growth SEGMENT INSIGHTS • Revenue growth in both OEM and aftermarket categories • GFC autopilot certifications for King Air 200 and select Commander and Cessna aircraft • Recently received top supplier awards from Embr
Slide 8: Marine
Marine Revenue Operating income Operating margin Q1 2023 $279M $72M 26% 10% y/y growth SEGMENT INSIGHTS • Revenue growth primarily due to the timing of spring promotions • Launched the ECHOMAP UHD2 chartplotter series • Awarded a 2023 Top Product award from Boating Industry for the 5th consecutive y
Slide 9: Auto OEM
Auto OEM Revenue Operating income Operating margin Q1 2023 $81M ($20M) (24%) 11% y/y growth SEGMENT INSIGHTS • Revenue growth driven by increased shipments of domain controllers • Began production for additional BMW models • Launched infotainment solution for additional models of Yamaha sport tourin
Slide 10: Financial Update
Financial Update Doug Boessen CFO and Treasurer
Slide 11: Income Statement
Income Statement Q1 (in millions) Q1 2023 Q1 2022 Y/Y Net sales $1,147 $1,173 (2%) Gross profit 653 662 (1%) Margin % 56.9% 56.5% 40 bps Operating expenses 456 434 5% Operating income $197 $229 (14%) Margin % 17.2% 19.5% (230 bps) GAAP EPS $1.05 $1.09 (4%) Pro Forma EPS $1.02 $1.11 (8%)
Slide 12: Revenue
Revenue Q1 (in millions) Q1 2023 Q1 2022 Change Fitness $245 $221 11% Outdoor 329 450 (27%) Aviation 214 175 22% Marine 279 254 10% Auto OEM 81 73 11% Total $1,147 $1,173 (2%) (in millions) Q1 2023 Q1 2022 Change Americas $612 $571 7% EMEA 356 397 (10%) APAC 180 205 (12%) Total $1,147 $1,173 (2%)
Slide 13: Operating Expenses
Operating Expenses R&D SG&A Advertising $250 $225 $221 $209 $204 $200 $191 $175 $150 (in millions) $125 $100 $75 $50 $34 $30 $25 $0 Q1 2022 Q1 2023
Slide 14: Other Financial Items
Other Financial Items Q1 2023 Balance Sheet Cash Flow Taxes Cash and marketable securities Free Cash Flow Effective Tax Rate $2.71B $232M 8.8% Accounts receivable Capital Expenditures $611M $47M Inventory Dividends Paid $1.48B $140M Share Repurchases $41M
Slide 15: GARMIN.
A GARMIN.
Slide 16: Appendix
Appendix May 3, 2023
Slide 17: Change in reportable segments
Change in reportable segments The Company announced an organization realignment in January 2023, which combined the consumer auto operating segment with the outdoor operating segment. As a result, the Company’s operating segments, which also represent our reportable segments, are fitness, outdoor, a
Slide 18: Non-GAAP Financial Information
Non-GAAP Financial Information To supplement our financial results presented in accordance with GAAP, this release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: pro forma effective tax rate, pro forma net income (earnings) per share
Slide 19: Pro forma net income (earnings) per share
Pro forma net income (earnings) per share Management believes that net income (earnings) per share before the impact of foreign currency gains or losses and certain discrete income tax items, as discussed above, is an important measure in order to permit a consistent comparison of the Company’s perf
Slide 20: Free cash flow
Free cash flow Management believes that free cash flow is an important liquidity measure because it represents the amount of cash provided by operations that is available for investing and defines it as operating cash flows less capital expenditures for property and equipment. Management believes th
Slide 21: Forward-looking financial measures
Forward-looking financial measures The forward-looking financial measures in our 2023 guidance do not consider the potential future net effect of foreign currency exchange gains and losses, certain discrete tax items and any other impacts that may be identified as pro forma adjustments in calculatin