Logitech International S.a. · SIX:LOGN
Logitech International — Q1 FY2020 Earnings Presentation
22 slides from Logitech International's earnings presentation, Jul 22, 2019
Slide 1: Q1 Fiscal Year 2020 Financial Results
logitech Q1 Fiscal Year 2020 Financial Results Newark, July 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 months ended June 30, 2019, objectives, innovation, momentum,
Slide 3: Key Messages - Q1 FY 2020
KEY MESSAGES - Q1 FY 2020 Strength of our diversified product portfolio drove Q1'20 sales up 9% (CC) to $644M Strong top-line performance, led by double-digit sales growth in Video Collaboration, Tablets & Accessories, Mobile Speakers, Audio & Wearables Gross margin improved 40 bps to 37.8%, driven
Slide 4: What's New from Logitech
Slide 5: Video Collaboration
VIDEO COLLABORATION Logitech Sync is our new video conferencing device management platform for seamless cloud-based administration, insights, and control Provides remote monitoring and management for Logitech meeting room devices Automatically highlights issues in real- time that need attention and
Slide 6: Mobile Speakers
MOBILE SPEAKERS The has been redesigned with a stylish two-tone fabric and new colorways All-new Outdoor Boost mode delivers louder, crisper audio with a built-in and pre-adjusted equalizer (EQ) that compliments any outdoor environment eS —_ Equipped with more bass, 30% longer battery life (13 hours
Slide 7: Gaming
GAMING The ASTRO A50 Wireless was engineered to provide the highest quality sound and most immersive audio experience ASTRO Audio V2 brings the latest audio technologies to the headset, and the ability to customize the sound profile through the ASTRO Command Center (ACC) software Optimized for spati
Slide 8: Gaming
GAMING Logitech G PRO X Gaming headset was designed with top esports athletes to offer incredible sound and voice technology Developed in partnership with Blue Microphones, the PRO X headset marks the debut of Blue VO!CE software, which offers a suite of real-time microphone effects that enables cle
Slide 9: Financial Results
FINANCIAL RESULTS
Slide 10: Q1'20 Results Kick Off Strong Start to the Year
Q1'20 RESULTS KICK OFF STRONG START TO THE YEAR a soos | 600 15% YoY % chg 6% YoY % chg (CC) 9% 12% Gross profit 243 227 7% % margin 37.8% 37.4% 40 bps Operating expense 176 167 6% % of sales 27.4% 27.4% 0 bps % margin 10.4% 9.9% 50 bps Net income 66 57 14% % margin 10.2% 9.4% 80 bps Earnings per sh
Slide 11: Diversified Portfolio Drove Healthy Growth
DIVERSIFIED PORTFOLIO DROVE HEALTHY GROWTH rer al Pointing Devices Keyboards & Combos 129 PC Webcams 28 Tablet & Accessories 38 Video Collaboration 73 Mobile Speakers 50 Audio & Wearables 59 Gaming 135 Smart Home 128 30 32 59 34 52 136 (5%) 0% (5%) 18% 25% 47% 12% (1%) 9% (2%) 3% (3%) 21% 28% 51% 15
Slide 12: Balanced Growth from All Three Regions
BALANCED GROWTH FROM ALL THREE REGIONS [=| a (SS) S$) (USS) digit growth in Video Collaboration and Americas | Mobile Speakers offsetting difficult EMEA 179 161 17% 12% 5% Gaming comparisons against last year Asia Pacific EMEA sales momentum increased to sous | S608 #17% (CC), with contribution from
Slide 13: Healthy Gross Margins Within Target Range
HEALTHY GROSS MARGINS WITHIN TARGET RANGE Non-GAAP Gross Margin Q1'20 gross margin expanded 40 basis 4% . . . points to 37.8% in spite of unfavorable 40% : currency exchange rates and China 39% | One-time benefit { tariff headwinds ° | from legal settlement ' ' New target range { { { Improved gross
Slide 14: Continued Investments for Long-Term Growth
CONTINUED INVESTMENTS FOR LONG-TERM GROWTH Sales & marketing % of sales 18.0% 17.9% Research & development 40 37 % of sales 6.2% 6.2% General & administrative 20 21 % of sales 3.1% 3.4% 7% 10 bps 7% 0 bps (3%) (30 bps) Operating expenses $176 $167 % of sales 27.4% 27.4% 0 bps Operating expenses +6%
Slide 15: Maintaining Solid Working Capital Metrics
MAINTAINING SOLID WORKING CAPITAL METRICS Cash from operations Ending cash balance! 598 Inventory 297 Inventory turns 5.5 DSI 66 Accounts receivable 419 DSO 59 Accounts payable 339 Cash conversion cycle 41 days (7 days) 604 273 5.6 64 386 57 344 80 (6) 24 (0.1turn) 0.2 turn 2 days 33 2 days (5) (5 d
Slide 16: Fiscal Year 2020 Outlook
FISCAL YEAR 2020 OUTLOOK FY’20 OUTLOOK Sales CC growth Mid to high single-digits Non-GAAP operating income $375 - 385M Currency FY'19 average rates Non-GAAP effective tax rate 7-8% Cash from operations ~1x non-GAAP operating income Capex $40 - 50M Note: Comparisons are YoY unless otherwise specified
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 June 30, SUPPLEMENTAL FINANCIAL INFORMATION 2019 2018 Gross profit - GAAP $ 238,976 $ 223,937 Share-based compensation expense 1,158 1,130
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 “ Three Months Ended June 30, SUPPLEMENTAL FINANCIAL INFORMATION 2019 ——~CTS Operating income - GAAP $ 47467 $ 32,451 Share-based compensation expense 12,218 13
Slide 20: GAAP to Non-GAAP Reconciliation Notes
GAAP TO NON-GAAP RECONCILIATION NOTES Note: These preliminary results for the month ended June 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 condensed con
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 — Q1 FY2020 Earnings Presentation on 6ix