Logitech International S.a. · SIX:LOGN
Logitech International — Investor Day (March 2019)
20 slides from Logitech International's investor day presentation, Mar 6, 2019
Slide 1: Vincent Pilette, CFO
Vincent Pilette CFO
Slide 2: Forward-Looking Statements & Non-GAAP Reporting
FORWARD-LOOKING STATEMENTS & NON-GAAP REPORTING This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: fiscal year 2019 sales growth and operating income outlook, retail sales growth, operatin
Slide 3: Reaffirm Fiscal Year 2019 Outlook
; » REAFFIRM FISCAL YEAR 2019 OUTLOOK +9-11% Sales growth (CC) Operating income Note: Figures are non-GAAP. Comparisons are YoY and in constant currency (CC) unless otherwise specified.
Slide 4: Remember This from March 2017?
REMEMBER THIS FROM MARCH 2017? $0.15- ($0.45) - eo $0.20 ($0.50) ~$0.40 || $
Slide 5: Compounded Three Year Performance
COMPOUNDED THREE YEAR PERFORMANCE Retail sales Operating margin Operating income avg CC expansion CAGR Note: Figures are non-GAAP. Comparisons are YoY and in constant currency unless otherwise specified. Growth is based on a 3-year period ending FYI9E. FYI9E figures are based on mid-point of guidanc
Slide 6: Growth with Consistent Operating Leverage
GROWTH WITH CONSISTENT OPERATING LEVERAGE Retail sales growth Operating income growth +19-20% | mR > FY17 FY18 FY19E Note: Figures are non-GAAP. Comparisons are YoY and in constant currency (CC) unless otherwise specified. FY19E figures are based on current guidance.
Slide 7: Gross Profit Outgrowing Opex Spend
GROSS PROFIT OUTGROWING OPEX SPEND > Gross profit CAGR~15% ~$700M Operating $577M xpense CAGR ~11% i FYI7 FY18 FYI9E . Non-GAAP gross profit and operating expense Note: CAGR is based on a 3-year period ending FYI9E. FYI9E figures are based on mid-point of guidance.
Slide 8: Gross Profit Funding Investments
GROSS PROFIT FUNDING INVESTMENTS —_# Funding sources Investments Design for cost Gi Profit New products Disciplined promos Software innovation Scale and mix ¥ » Branding & marketing Lower logistics costs Direct sales force G&A efficiencies New capabilities FY17 FY18 FY19E Note: CAGR is based on a 3-
Slide 9: Operating Margin Growth
OPERATING MARGIN GROWTH Target non-GAAP operating margin 10% to 12% FY17 Non-GAAP operating income and margin Note: FYI9E figures are based on mid-point of guidance.
Slide 10: Financial Outlook
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Slide 11: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK FY 2020 OUTLOOK Sales growth (CC) Mid- to high-single digits Non-GAAP operating income $375 - 385M Currency ASSUMPTIONS FY 2019 average rates Non-GAAP effective tax rate 7-8% Cash from operations 1x non-GAAP operating income Capex $40 - 50M Note: CC = constant currency.
Slide 12: FY 2020 Growth Expectations by Market
FY 2020 GROWTH EXPECTATIONS BY MARKET CATEGORY OUTLOOK GROWTH (CC) Creativity & Productivity Low-single digits Video Collaboration 25 - 30% Gaming 15 - 20% Music Flat to down single digits Smart Home Too small Note: CC = constant currency.
Slide 13: Long-Term Financial Model
LONG-TERM FINANCIAL MODEL PRIOR NEW Long-term growth prioritized over High-single digits High-single digits margin expansion demand (opex) Operating margin 10 to 12% 11 to 14% over promos (GM) Note: Figures are non-GAAP. CC = constant currency.
Slide 14: Consistent Capital Allocation
CONSISTENT CAPITAL ALLOCATION #1 M&A #2 Dividends #3 Share buyback
Slide 15: Constantly Evaluating Build vs Buy
Slide 16: Astro Gaming — Case Study
ASTRO GAMING — CASE STUDY BUILD Slower time to market Longer time to profitability G not well known in console market No need for integration Extend current G brand Higher R&D and marketing expenses BUY Faster time to market Immediately accretive Strong console brand recognition Time needed for inte
Slide 17: Ramping Up Astro Sales
RAMPING UP ASTRO SALES Before acquisition After acquisition Market growth Expand product portfolio Go-to-market expansion New adjacencies 2015 2016 2017 2018
Slide 18: Acquisition Criteria
ACQUISITION C1) Secular growth Adjacent ponds with secular growth trends CRITERIA Serving the user whether they are at home, at work, or on the go 2 ) Creates leading cloud peripherals player avtro Core capabilities across Design, Engineering, Go- to-Market, Marketing, and Operations (ius) LAS oO Sc
Slide 19: What is our potential now?
What is our potential now? 1 2 3 4 video music C&P gaming Collaboration smart home other cloud-based peripherals ~$1.5 B >$1 B >$1 B net sales net sales net sales BUILD High-end of range Within range Above range OR gross margin gross margin gross margin BUY
Slide 20: Logitech
logitech