ANALYST AND INVESTOR DAY 2 MARCH 2016

Transcription

1 ANALYST AND INVESTOR DAY 2 MARCH 2016 THE NEW LOGITECH BRACKEN DARRELL

2 FORWARD LOOKING STATEMENTS This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: sales growth, cost savings, research and development spending, free cash flow, growth potential of product categories, addressable markets, growth drivers, and growth opportunities. These statements are subject to risks and uncertainties that may cause actual results and events to differ materially, including without limitation: if our product offerings, marketing activities and investment prioritization decisions do not result in the sales, profitability or profitability growth we expect, or when we expect it; the demand of our customers and our consumers for our products and our ability to accurately forecast it; if we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories; if we do not successfully execute on our growth opportunities in our new product categories or our growth opportunities are more limited than we expect; if sales of PC peripherals are less than we expect; the effect of pricing, product, marketing and other initiatives by our competitors; if our products and marketing strategies fail to separate our products from competitors products; if we do not fully realize our goals to lower our costs and improve our operating leverage; if there is a deterioration of business and economic conditions in one or more of our sales regions or product categories, or significant fluctuations in exchange rates. These risks and uncertainties are detailed in Logitech s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2015 and its Annual Report on Form 10-K for the fiscal year endedd March 31, 2015, available at under the caption Risk Factors and elsewhere. Logitech does not undertake any obligation to update any forward-looking statements to reflect new information or events or circumstances occurring after the date of this presentation. Market share information is based on the aggregate sales across certain countries for which we have obtained data, varying by product category. Most product categories include the U.S., Canada, Japan, Denmark and France markets. ipad Keyboards adds Australia and Great Britain. PC and Mobile Speakers also add the Netherlands. Gaming Mice, Pointing Devices and Keyboards also add India, Korea, Thailand, Taiwan, China, Russia, Sweden and Turkey (but not the Netherlands). Home Control only includes the U.S. Webcams only includes the U.S. and Canada. To facilitate comparisons to Logitech s historical results, Logitech has included non-gaa AP adjusted measures in this presentation, which exclude primarily share-based compensation expense, amortization of other intangible assets, restructuring charges (credits), other restructuring-related charges, investment impairment (recovery), and one- with our earnings releases and presentations in the Investors section of time special charges. Historical GAAP and corresponding non-gaap measures are provided Logitech s website. For purposes of this presentation, Logitech provides non-gaap financial information for its Retail (excluding OEM and Lifesize) categories that includes approximations for cost and profitability estimates. Logitech also presents percentage sales growth in constant currency ( CC ), a non-gaap measure, to show performance unaffected by fluctuations in currency exchange rates. Percentage sales growth in constant currency is calculated by translating prior period sales in each local currency at the current period s average exchange rate for that currency and comparing that to current period sales. Logitech believes this information will help investors to evaluate its current period performance, outlook and trends in its business. For historical financials providedd in this presentation, reconciliation between non-gaap amounts and GAAP amounts is provided on the Investors page of Logitech s website, together with this presentation. With respect to financial outlook, most of the excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided for non-gaap outlook.

3 WHAT WE VE DONE

4 RETURNED LOGITECH TO GROWT TH We revitalized Logitech s growth capability 1,960 1,940 ~7% - 9% 9% 1,920 1,900 7% 1,880 1,860 1,840 2% 4% 5% 3% 1,820 1% 1,800 1,780 (1%) 1,760 FY13 FY14 FY15 Retail Sales Retail Sales YoY% CC FY16 Outlook (3%) (6%)

5 CREATED A DIVERSIFIED AND GROWING PORTFOLIO 3 new categories since 2013 ~$450M of sales in FY16* Mice & Keyboards growing +4% in FY16* Mobile Speakers Video Collaboration Tablet Accessories 2/ 3 of c categories = 80% of sales growing in FY16* *Expected

6 DEMONSTRATED ABILITY TO GROW MARKET SHARE Achieved Leadership in Almost Every Category Gaming Mice #1 +1pt Pointing Devices #1 +2pts Home Control #1 +4pts Keyboards #1 Gaming Headsets #1 PC Speakers #1 Mobile Speakers #2 +6pts +7pts +7pts +7pts ipad Keyboards #1 +10pts Webcams #1 +16pts Increase in market share YoY

7 DELIVERED EXCEPTIONAL VALUE FOR SHAREHOLDERS An early 2013 investment in LOGI would have generated 142% return in three years SMI ~Flat S&P % Nasdaq 100 Total Shareholder Return 40% LOGI 142%

8 HOW WE WIN

9 THE FOUNDATION FOR FUTURE GROWTH Power rful design Revitalized product creation existing and new categories A winning team around the world Outsta anding execution

10 EXCEPTIONAL DESIGN CAPABILITY Design Focus Works as a Strategic Choice Design Value Index vs. S&P 500 DESIGN CONSCIOUS COMPANIES: APPLE NIKE PROCTER & GAMBLE 3M STARBUCKS INTUIT HERMAN-MILLER DISNEY 70+ Design Awards in last 3 Years

11 NEW CAPABILITIES AND EXPANDED EXPERIENCES Hardware Embedded SW Application Cloud Data/Analytics Insights/Real Time Intelligence New Benefits & Services

12 RICHER EXPERIENCES FOR CONNECTED LIVES UE Boom Logi Circle Harmony

13 A TALENTED AND PASSIONATE TEAM Overall Rating Improvement +54% +263% Number of Job Applications YoY Reduced Layers and Increased Span of Control

14 OPERATIONAL EXCELLENCE Offsetting ~50% currency impact through price increases and cost savings in FY16 Reduced operating expenses by ~5pts 5pts over the last 3 years to ~26% of sales in FY16 while reallocating resources to R&D (+7% YoY) to drive growth Profit growth and improved working capital generated strong free cash flow of ~$0.5B over 3 years 30 Improved Cash Conversion Cycle ~20-22 Dramatic cash ash conversion cycle improvement FY13 FY14 FY15 FY16

15 WHERE WE PLAY

16 5 BIG MARKETS ALL WITH STRONG GROWTH POTENTIAL Gaming Music Productivity & Creativity Video Collaboration Home

17 GAMING GROWING BEHIND RISE OF PC GAMING VIRTUAL/AUGMENTED REALITY COMING SOON TOTAL ADDRESSABLE MARKET ~15% ~25% Total PC Total Gaming CAGR Gear CAGR GROWTH DRIVERS esports up 33% vs $3.6B Cross Platform Gear $2.0B 25% CAGR Cross Platform $2BGear VR/AR $1.3B 15% CAGR 2015 PC Gaming Gear 2018P Source: NPD, GFK, Tractica, Riot, management estimates 36M viewers in 2015 Virtual and Augmented Reality

18 VIDEO COLLABORATION SPREADING TO EVERY ROOM TOTAL ADDRESSABLE MARKET ($ Equipment per Room) ~40% Total estimated CAGR GROWTH DRIVERS More Rooms 9.7M More Users 4.2M # of Rooms Better, Simpler, and Affordable Solutions P Source: Wainhouse Research and management estimates

19 MUSIC PROPELLED BY STREAMING REVOLUTION TOTAL ADDRESSABLE MARKET GROWTH DRIVERS ~15% Total CAGR Streaming $9B Paid Streaming Music Subscribers $6B Audio Wearables New Features and Experiences Audio Wearables Mobile Multi Purpose Speakers WiFi Connected P Sources: NPD, GFK, Nielsen, P. Schoenfeld Asset Management and management estimates P CAGR 68M 177M 38%

20 HOME, THE EARLY STAGES OF TRANSFORMATION TOTAL ADDRESSABLE MARKET GROWTH DRIVERS Standards ~40% Total CAGR $2.2B Control Compelling Use Cases $1B Monitoring Which area(s) of the house would you be most excited to connect in a smart home system? Entertainment Room 43% Kitchen Bedroom P Source: NPD, GFK, IHS Research, Technavio, Icontrol Networks survey, management estimates 41% 39%

21 PRODUCTIVITY AND CREATIVITY STABLE WITH POTENTIAL TO GROW TOTAL ADDRESSABLE MARKET ~Flat Total CAGR GROWTH DRIVERS Evolving Use Cases ~$4B ~$4B +37% Growth in time spent on PC since 2010 (U.S. comscore data) Input Input Navigation Navigation Content - Device & OS Agnostic Continued Innovation P Source: NPD, comscore, management estimates

22 PC INSTALLED BASE STABLE AND FUELING GROWTH POTENTIAL FOR MICE AND KEYBOARDS PC shipments are declining PC INSTALLED BASE ACTUAL DIGITAL MEDIA TIME SPENT (U.S.) Smartphon e +394% But PC installed base is stable at 1.6B Tablet +1,721% PC +37% 2012 Source: IDC, comscore 2015 DEC 2010 DEC 2014

23 THE ROAD AHEAD Music Gaming Home ~$20B TAM by 2018 Productivity & Creativity Video Collaboration

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