Logitech International S.a. · SIX:LOGN
Logitech International — Q3 FY2018 Earnings Presentation
23 slides from Logitech International's earnings presentation, Jan 23, 2018
Slide 1: Q3 Fiscal Year 2018 Financial Results
logitech Q3 Fiscal Year 2018 Financial Results Lausanne, ee 23, 2018
Slide 2: 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, 2017, resolution of our distribution center issues, pr
Slide 3: Key Messages - Q3 FY2018
KEY MESSAGES —- Q3 FY2018 Strongest quarterly top-line ever, with sales up 18% (CC) to $812M Gaming and Mobile Speaker sales increased 57% (CC) and 34% (CC), respectively First full quarter of ASTRO Gaming, which was better than expected and represented roughly 4% of Q3 sales Gross margin of 34.4% i
Slide 4: What's New from Logitech
WHAT'S NEW FROM LOGITECH
Slide 5: Mobile Speakers
MOBILE SPEAKERS ULTIMATE EARS MEGABLAST and BLAST expand our product line-up with portable speakers integrated with Alexa voice control Comes with Wi-Fi, Bluetooth, and far- field mics so you can listen at home or on the go Waterproof, dustproof and with long- lasting battery life ULTIMATE EARS POWE
Slide 6: Jaybird
JAYBIRD is a truly wireless earbud designed for athletes Delivers a secure, run-specific comfort-fit that is sweat-proof and water resistant Offers four hours of battery life ona single charge, while the pocket-sized charging case provides an additional eight hours A quick, five-minute charge gives
Slide 7: Gaming
GAMING ASTRO A20 broadens our line-up of console gaming headsets Compatible with PlayStation 4, Xbox One family, Windows 10 PCs, and Mac iOS Engineered for extended gaming sessions, featuring comfortable and lightweight cloth ear cushions Includes a uni-directional mic with Flip- to-Mute functionali
Slide 8: Keyboards & Combos
KEYBOARDS & COMBOS LOGITECH CRAFT is our flagship advanced keyboard with a creative input dial, called the Crown The Crown offers context and app-specific functions with just a touch, tap or turn of the dial Features smart illumination with backlighting that automatically detects your hands and room
Slide 9: Pointing Devices
POINTING DEVICES LOGITECH MX ERGO is our newest, innovative trackball Offers personalized comfort with a unique adjustable hinge (from 0 to 20°, improving wrist posture and pronation) Reduces muscle strain by 20% compared to using a standard mouse Enabled with Easy-Switch and Flow, allowing you to c
Slide 10: Financial Results
FINANCIAL RESULTS
Slide 11: Q3 FY2018 Delivers Record High Sales
Q3 FY2018 DELIVERS RECORD HIGH SALES ee sera | 57 YoY % chg 22% 7% YoY % chg (CC) 18% 8% Gross profit 279 249 12% % margin 34.4% 37.4% (300bp) Operating expense 162 150 8% % of sales 20.0% 22.5% (250bp) % margin 14.4% 14.9% (50bp) Net income 11 92 20% % margin 13.6% 13.9% (30bp) Earnings per share $
Slide 12: Robust Growth from Several Key Categories
ROBUST GROWTH FROM SEVERAL KEY CATEGORIES Pointing Devices Keyboards & Combos 126 PC Webcams 27 Tablet & Accessories 27 Video Collaboration 46 Mobile Speakers 147 Audio PC & Wearables 84 Gaming 174 Smart Home 125 31 25 36 107 67 107 (1%) 1% (11%) 7% 29% 38% 26% 62% 44% (4%) (2%) (13%) 5% 25% 34% 21%
Slide 13: Underlying Sell-Through Remains Strong
UNDERLYING SELL-THROUGH REMAINS STRONG Sell-through er Americas 291 31% 30% 24% EMEA 254 233 9% 2% 23% Asia Pacific 143 25% 29% Regional Sales YoY% CC 30% 30% Americas 22% 23% Asia Pacific 14% 8% 2% EMEA Qui7 Q2'17 Q3'17 Q4a'i7 quis Q2'1s Q3'18 Americas sales +30% (CC), driven by stable PC periphera
Slide 14: Gross Margin Ex-DC Costs Tracks Seasonality
GROSS MARGIN EX-DC COSTS TRACKS SEASONALITY 40% 39% 38% 37% 36% 35% 34% 33% 32% Qii7 Non-GAAP Gross Margin Benefit from breakage! Q2'17 Q3'17 Q4'17 Note: Figures are for illustrative purposes only. (1) @4'17 non-GAAP gross margins include the first-time implementation of a breakage model for EMEA, w
Slide 15: Disciplined Opex Investments to Drive Leverage
DISCPLINED OPEX INVESTMENTS TO DRIVE LEVERAGE i 9 a osi7 | voy Operating expenses +8% as we balanced our seasonal investments Y . . Sales & marketing 4% with lower gross margins % of sales 13.7% 14.7% (100bp) Research & development 33 31 5% Increased S&M spending (+14%) to eames AGG ARR (70bp) suppo
Slide 16: Maintaining Strong Working Capital Metrics
MAINTAINING STRONG WORKING CAPITAL METRICS oe O17 la Cash from operations Ending cash balance ") 565 Inventory 279 Inventory turns 7.7 DSI 47 Accounts receivable 352 DSO 39 Accounts payable 429 514 250 6.7 54 278 37 358 77 51 29 1.0 turns (7 days) 74 2 days 71 (5 days) Cash flow from operations of $
Slide 17: Fiscal Year 2018 Outlook
FISCAL YEAR 2018 OUTLOOK FY2018 OUTLOOK NEW OLD Sales CC growth Up 12-14% Up 10-12% Non-GAAP operating income $270 - 280M $260 - 270M Note: Comparisons are YoY unless otherwise specified.
Slide 18: 18
18
Slide 19: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS LOGITECH INTERNATIONAL S.A. PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION “'®) SUPPLEMENTAL FINANCIAL INFORMATION Three Months Ended Nine Months Ended December 31, December 31, 2017 2016 2017 2016 Gross pro
Slide 20: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP LOGITECH INTERNATIONAL S.A. PRELIMINARY RESULTS * (In thousands, except per share amounts) - Unaudited GAAP TO NON-GAAP RECONCILIATION RECONCILIATIONS Three Months Ended December 31, Nine Months Ended December 31, SUPPLEMENTAL FINANCIAL INFORMATION. 2017 2016 2017 2016 Operating inc
Slide 21: 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, 2017 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 Busine
Slide 22: 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 23: Logitech
logitech
Logitech International — Q3 FY2018 Earnings Presentation on 6ix