Apple Inc · NASDAQ:AAPL

Apple — Investor Presentation (November 2017)

21 slides from Apple's investor presentation, Nov 13, 2017

  1. Slide 1: Apple Inc

    Apple Inc 13 November 2017 Copyright © PSG

  2. Slide 2: Contents

    Contents 1. Nature of business 2. Recommendation 3. Financial review 4. Divisional review 5. Company guidance 6. Portfolio Guidance 2 Copyright © PSG

  3. Slide 3: Nature of business

    01 Nature of business 3 Copyright © PSG

  4. Slide 4: Nature of business

    Nature of business Product Segments: Revenue Contribution by Region • iPhone (62% of revenue) 6.6% 7.7% • Services (13% of revenue) - Digital Content, iCloud, AppleCare, App Store 42.1% 19.5% • Mac (11% of revenue) • iPad (8% of revenue) • Other Products (6% of revenue) 24.0% - Apple TV, Apple Watch

  5. Slide 5: Recommendation

    02 Recommendation 5 Copyright © PSG

  6. Slide 6: Recommended exposure of up to 2.18%

    Recommended exposure of up to 2.18% • Fairly valued • Strong expectations FY2018 - New product launches, - renewed momentum in China, - Expansion in gross margins – faster growth in the Services business • Risk from short product life cycles and rapidly changing technologies BUT: - Integration with

  7. Slide 7: Raising the Switching Costs

    Raising the Switching Costs Despite superior short-term growth expectations, improved confidence in the annuity income profile is essential to narrow valuation discount to consumer sector Relative Value Apple vs MSCI ACWI (Consumer Discretionary) Forward P/E Ratio 20 16.0 Consumer Discretionary 18 9

  8. Slide 8: Financial review

    03 Financial review 8 Copyright © PSG

  9. Slide 9: Financial review (FY17)

    Financial review (FY17) Revenue Growth By Geography Revenue ↑6% Gross margin ↓ 38.5% (2016: 39.1%) Americas Opera ng margin ↓ 26.8% (2016: Rest of Asia Pacific 27.8%) Europe Net income ↑6% Japan Diluted EPS ↑ 11% Greater China DPS for the year ↑11% to 240 US Cents -10% -5% 0% 5% 10% 15% Emerging Mar

  10. Slide 10: Divisional review

    04 Divisional review 10 Copyright © PSG

  11. Slide 11: iPhone

    iPhone 62% of Revenue Net sales ↑3% 2% increase in unit sales Higher average selling prices from iPhone mix Good Performance in Emerging Markets Q4 Double-digit growth in mainland China, the Middle East, Central & Eastern Europe, India & Mexico 11 Copyright © PSG

  12. Slide 12: iPad

    iPad 8% of Revenue Net sales ↓7% 4% decrease in unit sales Unfavourable mix leading to lower average selling prices Good Demand Q4 Strong in emerging markets U.S tablet market share up to 54% (4Q16: 47%) Initiatives in Enterprise market Partnership with Accenture & General Electric 12 Copyright © PS

  13. Slide 13: Mac

    Mac 11% of Revenue Net sales ↑13% Unit sales up 4% Higher average selling prices Exceptional result in Q4 Unit sales up 10% compared to global market decline of 1% (IDC estimate) Performance aided by Education Double-digit growth 13 Copyright © PSG

  14. Slide 14: Services

    Services 13% of Revenue Net sales ↑23% - subscribers up to 210m (195m Q3) App Store Good reaction to iOS 11 Core ML allows developers to utilize artificial intelligence in their Apps Apple Music Paid subscribers up 75% yoy iCloud Double-digit growth in revenue and average monthly subscribers Apple P

  15. Slide 15: Other Products

    Other Products 6% of Revenue Net sales ↑16% Apple Watch delivered 3rd consecutive quarter of unit growth ahead of 50% Watch Series 3 – cellular features without close proximity of iPhone Introduced new watch OS Wearables (Watch & AirPod) grew 75% in Q4 4K Apple TV launched in Q4 15 Copyright © PSG

  16. Slide 16: Company guidance

    05 Company guidance 16 Copyright © PSG

  17. Slide 17: Company guidance

    Company guidance • iPhone to benefit from new launches iPhone 8, iPhone 8 Plus & iPhone X • Good traction has been experienced in iPhone 8 & 8 Plus – now most popular models • Good growth in emerging markets – growth in new users could contribute to further upgrades • Guidance for 1Q18 • Increase in

  18. Slide 18: Portfolio guidance

    06 Portfolio guidance 18 Copyright © PSG

  19. Slide 19: Portfolio Guidance

    Portfolio Guidance Quality: above average ROE, high margins & strong cash generation Confidence: Strong balance sheet & stable earnings but some dispersion is market expectations • We are neutral on this stock • Recommended exposure up to 2.18% 19 Copyright © PSG

  20. Slide 20: Disclaimer

    Disclaimer The information and content made available through this webinar is provided by PSG as general information about the companies and their products and/or services. PSG does not guarantee the suitability or value of any information or particular investment source. Any information in this web

  21. Slide 21: FAIS Affiliates of the PSG Konsult Group are authorised financial services providers

    FAIS Affiliates of the PSG Konsult Group are authorised financial services providers. Copyright © PSG

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