Logitech International S.a. · SIX:LOGN
Logitech International — Q3 FY2019 Earnings Presentation
22 slides from Logitech International's earnings presentation, Jan 22, 2019
Slide 1: Q3 Fiscal Year 2019 Financial Results
_ logitech Q3 Fiscal Year 2019 Financial Results Lausanne, January 22, 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: our preliminary financial results for the three and nine months ended December 31, 2018, economic trends and o
Slide 3: Key Messages - Q3 FY 2019
KEY MESSAGES —- Q3 FY 2019 New top-line record, with Q3'19 net sales up 8% (CC) to $864M Strong double-digit sales growth in Gaming, Video Collaboration, and Creativity & Productivity offset weakness in Mobile Speakers Gross margin of 38.1%, driven by favorable product mix and better-than-expected c
Slide 4: What's New from Logitech
y ll WHAT'S NEW FROM LOGITECH
Slide 5: Gaming
GAMING C40 TR is the first pro-caliber controller for PlayStation® 4 and PCs from ASTRO Gaming designed to withstand the rigors of competitive play The Analog Stick or D-Pad are quickly and easily swappable and replaceable for better performance Offers optimal rear button layout for superior ergonom
Slide 6: Webcam
WEBCAM Logitech Capture software simplifies video production by incorporating professional controls in an easy-to-use app Available for all Logitech webcams and allows the user to customize videos and create great content all within the app Enables the user to record from multiple sources, create ve
Slide 7: Blue Microphones
BLUE MICROPHONES The XLR microphone brings professional recording features to a more consumer-friendly price point The custom hand-tuned condenser capsule captures maximum detail, while the tight cardioid pickup pattern helps reduce room and background noise Ember’s compact, side-address design fits
Slide 8: Jaybird
JAYBIRD is the first in Jaybird’s Pro Series: a new line of premium wireless sport headphones for endurance athletes Offers industry-leading 14 hours of battery life in an extremely durable, compact design Equipped with unique features geared towards athletes, such as a secure custom-fit and uncompr
Slide 9: Financial Results
INANCIAL RESULTS
Slide 10: Q3'19 Results Deliver Sales and Profit Records
Q3'19 RESULTS DELIVER SALES AND PROFIT RECORDS a sees | sor YoY % chg 6% 22% YoY % chg (CC) 8% 18% Gross profit 330 279 18% % margin 58.1% 54.4% 370 bps Operating expense 186 162 15% % of sales 21.6% 20.0% 160 bps % margin 16.6% 14.4% 220 bps Net income 134 111 21% % margin 15.5% 13.6% 190 bps Earni
Slide 11: Several Large Categories Drove Robust Growth
SEVERAL LARGE CATEGORIES DROVE ROBUST GROWTH Pointing Devices Keyboards & Combos PC Webcams Tablet & Accessories Video Collaboration Mobile Speakers Audio & Wearables Gaming Smart Home 144 33 36 74 96 99 214 41 6% 126 14% 27 21% 27 34% 46 60% 147 (35%) 84 17% 174 23% 39 (49%) 16% 23% 36% 64% (34%) 1
Slide 12: EMEA Improved to High-Single Digit Growth
EMEA IMPROVED TO HIGH-SINGLE DIGIT GROWTH MEMES ees $) | (CC) (Us) same period last year when sales rose Americas ' 1% 4% +30% (CC) EMEA 269 254 6% 9% 1% Improvements in EMEA operations Asia Pacific 18% 22% 9, + drove sales +9%, with robust growth meeS || Soe from PC Peripherals, Gaming, and som, Sa
Slide 13: Gross Margin Feeds Long-Term Growth Engine
GROSS MARGIN FEEDS LONG-TERM GROWTH ENGINE Non-GAAP Gross Margin Q3’19 gross margin was a better-than- One-time benefit expected 38.1%, due to favorable 2 . . 38% 4 One-time cost from legal settlement product mix and cost reductions from dual DCs! 37% 4-----}----------------| -- 36% - 34% | 33% ~ 32
Slide 14: Investing in Opex to Support Innovation
INVESTING IN OPEX TO SUPPORT INNOVATION Sales & marketing 14% % of sales 14.8% 13.7% 110 bps Research & development 39 33 18% % of sales 4.5% 4.0% 50 bps General & administrative 20 18 12% % of sales 2.3% 2.2% 10 bps % of sales 21.6% 20.0% 160 bps Operating expenses +15% as we re- invested our gross
Slide 15: Maintaining Solid Working Capital Metrics
MAINTAINING SOLID WORKING CAPITAL METRICS Cash from operations Ending cash balance! 586 Inventory 342 Inventory turns 6.3 DSI 57 Accounts receivable 484 DSO 50 Accounts payable 436 DPO 73 Cash conversion cycle 34 days 14days | 20 days 565 279 77 47 352 39 429 (13) 21 63 (1.4 turn) 10 days 132? 11 da
Slide 16: Raising Fiscal Year 2019 Outlook
RAISING FISCAL YEAR 2019 OUTLOOK FY 2019 OUTLOOK New Prior Sales CC growth Up 9-11% Up 9-11% Non-GAAP operating income $340 - 345M $325 - 335M Currency FY 2018 average rates Non-GAAP effective tax rate 6-7% Cash from operations 1x non-GAAP operating income Capex ~$45M Note: Comparisons are YoY unles
Slide 17: Appendix
APPENDIX
Slide 18: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “) Three Months Ended Nine Months Ended December 31, December 31, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 2018 2017 Gross profit -GAAP $ 323,982 $ 275,601
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION ‘45! Three Months Ended Nine Months Ended December 31, December 31, SUPPLEMENTAL FINANCIAL INFORMATION 2018 2017 2018 2017 Operating income - GAAP $ 123,384 $ 1
Slide 20: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the three and nine months ended December 31, 2018 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q. (A) Preliminary Valuation from the Business
Slide 21: Sell-Through Data
SELL-THROUGH DATA Measures sales of our products by retailer customers to consumers and by our distributor customers to their customers Compiled by Logitech from data supplied by our customers Customers supplying sell-through data vary by geographic region and from period to period, but typically re
Slide 22: Logitech
logitech
Logitech International — Q3 FY2019 Earnings Presentation on 6ix