Tech Data — Q1 FY2018 Earnings Presentation
27 slides from Tech Data's earnings presentation, Jun 1, 2017
Slide 1: Q1 Fiscal Year 2018 Financial Highlights
Q1 Fiscal Year 2018 Financial Highlights For the quarter ended April 30, 2017 June 1, 2017
Slide 2: Non-GAAP Financial Information
This document includes financial results prepared in accordance with generally accepted accounting principles (“GAAP”). In addition to GAAP results, Tech Data management believes that the presentation of non - GAAP financial measures is useful to investors because it provides investors with a more c
Slide 3: Worldwide Net Sales
Worldwide Q1 FY18: • Worldwide reported net sales of $7.7 billion increased 29% year - over - year and increased 3 % sequentially. The increase in net sales is primarily due to $1.6 billion for two months of net sales attributed to the Technology Solutions business acquired from Avnet, Inc. on Febru
Slide 4: Americas Net Sales
Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Americas $2.4 $2.7 $2.6 $2.7 $3.5 Reported Y/Y growth 2% -3% 2% 0% 45% Adjusted y/y growth⁽¹⁾ 4% -2% 2% 0% 45% $2.4 $2.7 $2.6 $2.7 $3.5 -4% -2% 0% 2% 4% 6% 8% 10% 12% $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $ in Billions Net Sales Americas Q1 FY18: • Americ
Slide 5: Europe Net Sales
$ in Billions Net Sales Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Europe $3.6 $3.7 $3.9 $4.7 $4.0 Reported Y/Y growth 1% -4% 1% -1% 12% Y/Y CC growth⁽¹⁾ 1% -2% 5% 3% 19% $3.6 $3.7 $3.9 $4.7 $4.0 -5% -3% -1% 1% 3% 5% 7% 9% 11% 13% 15% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Europe 5 Q1 FY18: • Europe’s report
Slide 6: Asia Pacific Net Sales
$ in Billions Net Sales Asia Pacific 6 Q1 FY18: • The Asia Pacific region’s reported net sales were $0.2 billion. • No prior period results reported for the region by Tech Data due to the acquisition of the Technology Solutions business on February 27, 2017. Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 A
Slide 7: Gross Profit and Margin Worldwide
7 $298.6 $316.5 $315.8 $371.0 $457.1 5.01% 4.98% 4.87% 5.00% 5.96% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Gross Profit Gross Margin $ in Millions Quarterly Results Q1 FY18: • Gross profit of
Slide 8: SG&A Expenses (Non-GAAP) Worldwide
$241.1 $238.4 $234.7 $248.9 $333.9 4.04% 3.75% 3.62% 3.35% 4.36% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non-GAAP SG&A exp $241.1 $238.4 $234.7 $248.9 $333.9 Non-GAAP SG&A % 4.
Slide 9: Operating Income (Non-GAAP) Worldwide
$57.6 $78.1 $81.1 $122.1 $123.2 0.97% 1.23% 1.25% 1.64% 1.61% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non-GAAP Operating Income $57.6 $78.1 $81.1 $122.1 $123.2 Non-GAAP Operating Margin 0.97% 1.23% 1.25% 1.64% 1.61% GAAP Operating Inc $52.6 $73.4 $62.9 $103.1
Slide 10: Operating Income (Non-GAAP) Americas
$31.4 $38.8 $42.5 $47.4 $78.5 1.32% 1.45% 1.62% 1.75% 2.26% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non - GAAP Operating Income⁽²⁾ $31.4 $38.8 $42.5 $47.4 $78.5 Non - GAAP Operating Margin⁽²⁾ 1.32% 1.45% 1.6
Slide 11: Operating Income (Non-GAAP) Europe
11 $29.8 $43.1 $42.2 $77.7 $44.1 0.83% 1.17% 1.09% 1.65% 1.10% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non - GAAP Operating Income⁽²⁾ $29.8 $43.1 $42.2 $77.7 $44.1 Non - GAAP Operating Marg
Slide 12: Operating Income (Non-GAAP) Asia Pacific
$5.2 2.76% 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0 1 2 3 4 5 6 7 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non - GAAP Operating Income⁽²⁾ $5.2 Non - GAAP Operating Margin⁽²⁾ 2.76% GAAP Operating Income⁽¹⁾ $4.3 GAAP Operating Margin⁽¹⁾ 2.28% 12 (1) Before stock compensation expense. (2) See the GAAP to
Slide 13: Net Income and EPS (Non-GAAP) Worldwide
$37.0 $50.3 $50.9 $87.0 $70.1 $1.05 $1.42 $1.44 $2.45 $1.87 $- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Non-GAAP Net Income $37.0 $50.3 $50.9 $87.0 $70.1 Non-GAAP EPS - diluted
Slide 14: Cash Metrics Worldwide
14 Cash Metrics Worldwide $276 - $91 $27 $445 $224 -$150 -$50 $50 $150 $250 $350 $450 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Cash Flow from Operations Cash Conversion Cycle $ Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Days of Sales Outstanding 39 39 40 37 49 Days of Supply 34 32 33 27 30 Days of Purch
Slide 15: Balance Sheet Highlights Worldwide
15% 15% 15% 39% 48% Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Debt $367 $362 $365 $1,363 $2,286 Equity $2,135 $2,108 $2,092 $2,170 $2,481 Debt to Total Capital ratio 15% 15% 15% 39% 48% Debt to Total Capital 15 $ in Millions Balance Sheet Highlights Worldwide Q1 FY18: • Accumulated other comprehensive loss
Slide 16: Return on Invested Capital Worldwide
11% 13% 14% 13% FY15 FY16 FY17 Q1 FY18 TTM • Company’s Weighted Average Cost of Capital is approximately 8% (2) (1) See reconciliation of ROIC calculation in appendix. (2) Source: Bloomberg, May 26, 2017. 16 Return on Invested Capital (1) Worldwide $
Slide 17: Product Mix Worldwide
Total may not foot due to rounding. 17 Product Mix Worldwide • In Q1 FY18, the following vendors represented 10% or more of consolidated net sales: • Apple 15% • HP Inc. 11% • Cisco 10% Products Q1 FY18* (% of TTM net sales) Broadline Notebooks, Tablets, Desktops, Printers & Supplies, Components 45%
Slide 18: Business Outlook Q2 Fiscal Year 2018
Business Outlook Q2 Fiscal Year 2018 Forward - Looking Statements Certain statements made in this document are “Forward - Looking Statements” as described in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties further described in Tech Data C
Slide 19: Appendix: GAAP to Non-GAAP Reconciliations
APPENDIX GAAP to Non - GAAP Reconciliations
Slide 20: SG&A Reconciliation
A - 1 Three months ended April 30, 2016 July 31, 2016 October 31, 2016 January 31, 2017 April 30, 2017 (In thousands) Net Sales $ 5,963,362 $ 6,353,739 $ 6,490,265 $ 7,427,510 $ 7,664,063 GAAP SG&A expenses 246,496$ 243,763$ 239,952$ 253,941$ 352,632$ Acquisition-related amortization of intangibles
Slide 21: Operating Income Q1 FY18
A - 2 Operating Income Q1 FY18 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ APAC ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 3,468,837$ 4,006,920$ 188,306$ 7,664,063$ GAAP operating income ⁽ ¹ ⁾ 50,900$ 24,799$ 4,297$ (4,918)$ 75,078$ LCD settlements and other, net (12,688)$ - - (12,688)$ Acquisition and
Slide 22: Operating Income Q4 FY17
A - 2 Operating Income Q4 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,707,286$ 4,720,224$ 7,427,510$ GAAP operating income ⁽ ¹ ⁾ 39,316$ 66,728$ (2,927)$ 103,117$ Acquisition and integration expenses 7,496 6,473 13,969 Acquisition-related amortization of inta
Slide 23: Operating Income Q3 FY17
A - 3 Operating Income Q3 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,614,347$ 3,875,918$ 6,490,265$ GAAP operating income ⁽ ¹ ⁾ 32,414$ 34,008$ (3,550)$ 62,872$ Acquisition and integration expenses 9,456 3,559 13,015 Acquisition-related amortization of intan
Slide 24: Operating Income Q2 FY17
A - 4 Operating Income Q2 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,674,886$ 3,678,853$ 6,353,739$ GAAP operating income ⁽ ¹ ⁾ 41,241$ 35,927$ (3,813)$ 73,355$ Value added tax assessments (407) 1,456 1,049 Acquisition and integration expenses 1,046 936 1,98
Slide 25: Operating Income Q1 FY17
A - 5 Operating Income Q1 FY17 Americas ⁽ ¹ ⁾ Europe ⁽ ¹ ⁾ Stock Compensation Expense Consolidated Net Sales 2,388,004$ 3,575,358$ 5,963,362$ GAAP operating income ⁽ ¹ ⁾ 31,275$ 24,940$ (3,657)$ 52,558$ LCD settlements and other, net (443) - (443) Acquisition-related amortization of intangibles 580
Slide 26: Net Income and Diluted EPS Reconciliation
A - 7 Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS Net IncomeDiluted EPS GAAP Results $33,373 $0.94 $46,394 $1.31 $36,506 $1.03 $78,822 $2.22 $30,654 $0.82 LCD settlements and other, net (443) (0.01) (3,699) (0.10) - - - - (12,688) (0.34) Value added tax as
Slide 27: ROIC Calculation
TTM Net Operating Profit After Tax Average Invested Capital – Average Cash TECD ROIC Formula: A - 8 January 31, 2015 January 31, 2016 January 31, 2017 April 30, 2017 Non-GAAP Net Operating Profit After Tax (NOPAT): Non-GAAP Operating Income $307,985 $319,069 $338,934 $404,583 Non-GAAP effective tax