Logitech International S.a. · SIX:LOGN
Logitech International — Q2 FY2020 Earnings Presentation
24 slides from Logitech International's earnings presentation, Oct 21, 2019
Slide 1: Q2 Fiscal 2020 Financial Results
Q2 Fiscal Financial October 21, 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 six months ended September 30, 2019, long-term trends, our
Slide 3: Key Messages — Q2 FY 2020
KEY MESSAGES — Q2 FY 2020 Delivered another consistent performance with @2'20 sales up 6% (CC) to $720M Solid top-line results, led by double-digit sales growth in Video Collaboration and stable growth in PC Peripherals, offsetting declines in Tablets & Accessories and Mobile Speakers Gross margin e
Slide 4: What's New from Logitech
WHAT'S NEW FROM LOGITECH
Slide 5: Pointing Devices
POINTING DEVICES The MX Master 3 is Logitech's flagship premium mouse, now redesigned to be even more productive Our MagSpeed Scroll Wheel is the fastest, quietest, and most advanced scrolling wheel to date Features Logitech MX signature Darkfield 4,000 DPI High Precision sensor that tracks on all s
Slide 6: Keyboards & Combos
KEYBOARDS & COMBOS The MX Keys is our advanced wireless illuminated keyboard that delivers a premium typing experience with fluid keystrokes and accurate, tactile responses Equipped with smart illumination, the backlighting detects your hands and adjusts keyboard lighting automatically Stays powered
Slide 7: Gaming
GAMING By combining Logitech G's advanced LIGHTSPEED wireless technology with our new high-performance low-profile GL Switches, the G915 LIGHTSPEED and G815 LIGHTSYNC RGB were designed to be our most advanced gaming keyboards For the first time in the gaming industry, Logitech G is offering next-gen
Slide 8: Gaming
GAMING The G604 LIGHTSPEED wireless gaming mouse was designed to offer gamers a versatile tool that can be used for a variety of tasks Features Logitech G’s exclusive LIGHTSPEED wireless technology for lag- free connectivity, as well as best-in-class HERO 16K Sensor Has 15 programmable controls, a d
Slide 9: Blue Microphone
BLUE MICROPHONE The Yeti X is Blue’s latest microphone for gaming, streaming, and podcasting Embedded with our new Blue VO!CE technology that enables content creators to dial up professional vocal effects and custom presets at the push of a button Features an 11-segment LED meter so streamers can ch
Slide 10: Streamlabs
STREAMLABS Logitech announced on Sept 26 that it has agreed to acquire Streamlabs, a leader in software and tools for live streaming Streamlabs OBS software offers customization tools that allows game streamers to better engage with viewers, grow their personal brands and channels, and monetize thei
Slide 11: Financial Results
FINANCIAL RESULTS | »
Slide 12: Q2'20 Results Demonstrate Strong Execution
Q2'20 RESULTS DEMONSTRATE STRONG EXECUTION sr0 ser YoY % chg 9% YoY % chg (CC) 6% 10% Gross profit 277 260 6% % margin 38.4% 37.6% 80 bps Operating expense 187 175 7% % of sales 26.0% 25.4% 60 bps % margin 12.4% 12.2% 20 bps Net income 85 83 2% % margin 11.8% 12.0% (20 bps) Earnings per share $0.50
Slide 13: Balanced Performance Across Categories
BALANCED PERFORMANCE ACROSS CATEGORIES Pointing Devices Keyboards & Combos 139 PC Webcams 29 Tablet & Accessories 34 Video Collaboration 90 Mobile Speakers 57 Audio & Wearables 68 Gaming 161 Smart Home 132 28 37 57 77 62 161 3% 5% 2% (8%) 57% (26%) 10% 0% 2% 7% 3% (6%) 60% (24%) 12% 2% Video Collabo
Slide 14: Consistent Trends from All Three Regions
CONSISTENT TRENDS FROM ALL THREE REGIONS Net sales oY Sell-thro (CC) S$) (US$) Americas 284 5% 5% EMEA 232 218 10% 6% 8% Asia Pacific 3% 1% 5% Sales growth YoY % (CC) oe Sales growth YoY % (US$) 26% Q1'19 _Q2'19_ Q3'19 _Q4'19 Q1'20 Q2'20 Q1'19_Q2'19_Q3'19_Q4'19_Q1'20 G2'20 ‘Americas EMEA Asia Pacifi
Slide 15: Gross Margins Within Target Range
GROSS MARGINS WITHIN TARGET RANGE Non-GAAP Gross Margin 41% 40% One-time benefit from legal settlement! 39% 38% 37% f+. 36% 35% 34% Qlg Q219 Q3'19 Note: Figures are for illustrative purposes only. Q2’20 gross margin increased 80 basis points to 38.4% despite continued unfavorable currency exchange r
Slide 16: Reinvestments for Long-Term Growth
REINVESTMENTS FOR LONG-TERM GROWTH Sales & marketing 9% % of sales 17.7% 16.9% 80 bps Research & development 40 38 6% % of sales 5.5% 5.4% 10 bps General & administrative 20 21 (3%) % of sales 2.8% 3.0% (20 bps) % of sales 26.0% 25.4% 60 bps Operating expenses +7% as we reinvested gross profit dolla
Slide 17: Working Capital Metrics Remained Healthy
WORKING CAPITAL METRICS REMAINED HEALTHY Cash from operations Ending cash balance! 575 Inventory 338 Inventory turns 5.3 DSI 68 Accounts receivable 466 DSO 58 Accounts payable 411 Cash conversion cycle 43 days | 43 days (7 days) 426 359 49 74 460 60 441 149 (20) 0.4 turn (6 days) 6 (2 days) (30) (8
Slide 18: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK FY'20 OUTLOOK Sales (CC) growth Mid to high single-digit Non-GAAP operating income $375 - 385M Currency exchange rates FY20 1H actuals and 2H projections ! Non-GAAP effective tax rate 7-8% Cash from operations ~1x non-GAAP operating income Capex $40 - 50M Note: Sales compari
Slide 19: Appendix
APPENDIX
Slide 20: 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 Six Months Ended September 30, September 30, SUPPLEMENTAL FINANCIAL INFORMATION 2019 2018 2019 2018 Gross profit - GAAP 272,076 $ 256,117
Slide 21: 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 Six Months Ended September 30, September 30, SUPPLEMENTAL FINANCIAL INFORMATION 2019 2018 2019 2018 ‘Operating income - GAAP $ 68,055 $§ 6
Slide 22: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the month ended September 30, 2019 are subject to adjustments, including subsequent events that may occur through the date of filing our Quarterly Report on Form 10-Q. (A) Non-GAAP Financial Measures To supplement our condense
Slide 23: 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 24: Logitech
logitech
Logitech International — Q2 FY2020 Earnings Presentation on 6ix