Logitech-AID-Deck-220302.pdf
- 1. LOGITECH ANALYST AND INVESTOR DAY MARCH 3, 2022
- 2. AGENDA STRATEGY & OUTLOOK VIDEO COLLABORATION CREATIVITY & PRODUCTIVITY GAMING STREAMERS & CREATORS OPERATIONS & SUSTAINABILITY FINANCIALS 4 14 55 77 95 112 131
- 3. 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 growth strategy and outlook; trends, opportunities and implications in Video Collaboration, Gaming, Creativity & Productivity, and Streamers & Creators; our future in metaverse; our sustainability commitments, climate positive strategy and sustainability goals; growth opportunities, challenges, capital allocation strategy, fiscal year 2022 outlook, fiscal year 2023 outlook, fiscal year 2023 market growth expectations, our long-term model, and related assumptions. 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; 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 or our growth opportunities are more limited than we expect; the effect of demand variability, supply shortages, and other supply chain challenges; the effect of pricing, product, marketing and other initiatives by our competitors, and our reaction to them, on our sales, gross margins and profitability; if we are not able to maintain and enhance our brands; if our products and marketing strategies fail to separate our products from competitors’ products; the COVID-19 pandemic and its impact; our expectations regarding economic conditions in international markets, including China, Russia and Ukraine; macroeconomic, geopolitical, and other challenges and uncertainties globally as a result of the current armed conflict between Russia and Ukraine; if we do not efficiently manage our spending; 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; changes in trade regulations, policies and agreements and the imposition of tariffs that affect our products or operations and our ability to mitigate; risks associated with acquisitions; and the effect of changes to our effective income tax rates. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Logitech’s periodic filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2021, and our subsequent reports filed with the SEC, available at www.sec.gov, 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. NON-GAAP MEASURES To facilitate comparisons to Logitech’s historical results, we have included non-GAAP adjusted measures in this presentation, which exclude primarily share-based compensation expense, amortization of intangible assets, acquisition-related costs, change in fair value of contingent consideration for business acquisition, restructuring charges (credits), loss (gain) on investments, non-GAAP income tax adjustment, and other items detailed under “Supplemental Financial Information” in our quarterly earnings press release and posted to our website at ir.logitech.com. We also present 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 provided in this presentation, reconciliation between non-GAAP amounts and GAAP amounts is provided on the Investors page of our website, together with this presentation and with our earnings releases. 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.
- 4. STRATEGY & OUTLOOK Bracken Darrell March 2022 Achieving Strong, Long-Term Growth
- 5. To help all people pursue their passions…in a way that is good for the planet. PURPOSE
- 6. WHY WE’RE HERE WHERE WE PLAY HOW WE WIN
- 7. WHERE WE PLAY Growth Markets New Markets Exit / Scale Back
- 8. HOW WE WIN Design and Innovation Global Go-To-Market Sustainability Operational Excellence Marketing Financial Discipline People & Culture
- 9. GROW CORE CAPABILITIES CONTINUOUSLY, GROW MARKET SHARE TO LEADERSHIP POSITIONS CAPABILITIES CATEGORIES Design and Innovation Operational Excellence Global Go-To-Market Financial Discipline Sustainability GAMING VIDEO COLLABORATION CONTENT CREATION & STREAMING WORKSPACE SOLUTIONS Marketing People & Culture
- 10. WE PLAY IN BIG, ATTRACTIVE MARKET AREAS Video Collaboration ~100M conference rooms, only 10% penetration Creativity & Productivity ~1B workspaces, billions of product sales and upgrade opportunities Gaming 3B+ active gamers Streaming & Creating Over 190M content creators worldwide
- 11. DESIGN AND INNOVATION LEADERSHIP DESIGN CULTURE 260+ Awards Over Past 6 years
- 12. OPERATIONAL EXCELLENCE WITH A COMMITMENT TO SUSTAINABILITY LEADERSHIP OPERATIONAL EXCELLENCE COMMITMENT TO SUSTAINABILITY Climate Positive | Carbon Labeling | Growth Driver Customer Centric Supply Chain Diversified Manufacturing Resilient Operations
- 13. LEVERAGING STRONG CAPABILITIES TO GROW IN BIG MARKETS Design and Innovation Global Go-To-Market Sustainability Operational Excellence Marketing Financial Discipline People & Culture HOW WE WIN WE PLAY IN BIG, ATTRACTIVE MARKET AREAS Video Collaboration ~100M conference rooms, only 10% penetration Creativity & Productivity ~1B workspaces, billions of product sales and upgrade opportunities Gaming 3B+ active gamers Streaming & Creating Over 190M content creators worldwide
- 17. 4 KEY TRENDS: VIDEO IS TRANSFORMING WORK Video Becoming The Norm 1 Video Cloud is Dominant 2 Hybrid Work Creates New Opportunities 3 Shift from Products to Systems 4
- 18. 1VIDEO BECOMING THE NORM Video Becoming The Norm 1 Video Cloud is Dominant 2 Hybrid Work Creates New Opportunities 3 Shift from Products to Systems 4
- 19. EXPLOSION OF NEW VIDEO USERS Source: Craig Roth, December 11, 2019, Blog Post at www.blogs.gartner.com Source: Gartner Press Release, "Gartner Forecasts 51% of Global Knowledge Workers Will Be Remote by the End of 2021," June 22, 2021, LINK.
- 20. GOVERNMENT HEALTHCARE EDUCATION EVEN BIG, SLOW MOVING VERTICALS ARE USING VIDEO
- 21. 100M <10% Meeting Rooms and Classrooms are video enabled PLENTY OF ROOM TO GROW Small Rooms Mid to Large Rooms Total Meeting Room Penetration Classrooms 0% 10% 20% 30% 40% 50% 2020 2021 (Q1-3) 2026 Source: Frost & Sullivan Report K5BE-64 % of Rooms Video-enabled
- 22. TOTAL ADDRESSABLE MARKET EXPECTED TO NEARLY DOUBLE TO $10B Logitech estimates based on data from NPD, GfK, and 3rd party research. Conferencecams Personal (Headsets, Webcams, Docks) Personal (Headsets, Webcams, Docks) Conferencecams 2021 Mid Decade $5.8B $10B
- 23. 2VIDEO CLOUD IS DOMINANT Video Becoming The Norm 1 Video Cloud is Dominant 2 Hybrid Work Creates New Opportunities 3 Shift from Products to Systems 4
- 24. VIDEO CLOUD IS DOMINANT Platform Winners Chart: Primary platform share by business users Source: Bain & Company estimates. November 2020. Microsoft Teams Zoom Google ByteDance Lark China U.S. MICROSOFT, ZOOM, AND GOOGLE Have become the dominant players Remains a distinct market with higher platform concentration TENCENT AND ALIBABA CHINA Alibaba DingTalk Tencent Group Enterprise WeChat Tencent Meeting Others Huawei Welink Source: Q4, 2021 QuestMobile, Cloud VC China, WeChat Circle Community"
- 25. MICROSOFT/ZOOM EXPLOSIVE GROWTH HAS SET THE STAGE 2017 2018 2019 2020 2021 120 110 100 90 80 70 60 50 40 30 20 10 0 MICROSOFT TEAMS DAILY ACTIVE USERS2 $1,200M $1,000M $800M $600M $400M $200M $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 ‘22 $1,021M ZOOM REVENUE GROWTH Quarterly revenue of Zoom Video Communications1 2 Source: Microsoft Company data 1 Zoom's fiscal year 2022 ends January 31, 2022; Source: Zoom
- 26. 3HYBRID WORK BRINGS NEW OPPORTUNITIES Video Becoming The Norm 1 Video Cloud is Dominant 2 Hybrid Work Creates New Opportunities 3 Shift from Products to Systems 4
- 27. HYBRID WORK 5X LARGER THAN PRE-PANDEMIC Growing Share of Work From Home (WFH) Chart: % of U.S. Workforce 2021+ Pre Covid WFH (Multiple Days) Location-Based 25%+ 75% 95% Source: Global Workplace Analytics <5%
- 28. HYBRID WORK CREATES NEW OPPORTUNITIES
- 29. Video Becoming The Norm 1 Video Cloud is Dominant 2 Hybrid Work Creates New Opportunities 3 Shift from Products to Systems 4 4SHIFT FROM PRODUCTS TO SYSTEMS
- 30. 4SHIFT FROM PRODUCTS TO SYSTEMS Scheduler Control Hubs Accessories Front Camera Whiteboard Camera Remote Management
- 31. 4 SHIFT FROM PRODUCTS TO SYSTEMS Webcam Keyboard Mouse Dock Headset Remote Management SHIFT FROM PRODUCTS TO SYSTEMS
- 32. SYSTEMS APPROACH NEEDED ACROSS ORG Meeting Room Meeting Room Meeting Room Meeting Room Workspace Workspace
- 33. MARKET DRIVING MORE INNOVATION, BIG SYSTEM-LEVEL OPPORTUNITIES Video Becoming The Norm More (and upgraded) video needed Video Cloud is Dominant The speed of adoption and innovation is increasing Hybrid Work Creates New Opportunities Shift From Products To Systems These challenges create big new opportunities Increased complexity is driving a need to a Systems Approach
- 34. WHAT WE'VE DONE SECTION TWO
- 35. LOGITECH VIDEO COLLABORATION TRIPLED DURING THE PANDEMIC $1,000 $800 $600 $400 $200 $0 *FY22e 180% FY21 43% FY20 44% FY19 40% FY18 43% FY17 51% FY16 113% FY15 57% FY14 55% FY13 FY13-FY21 +56% CAGR Note: Figures based on net sales and year-over-year comparisons are in constant currency. Dollars in millions. YTDQ3FY21 YTDQ3FY22
- 36. COLLABORATION $1.6B WITH RETAIL; POISED TO BECOME THE NEXT $2B CATEGORY FY22e FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Video Collaboration Retail Personal Collaboration Note: Figures based on net sales and year-over-year comparisons are in constant currency. Dollars in millions. Retail Personal Collaboration includes the PC Webcams and PC Headsets categories (PC Headsets is reported as part of Music and Audio) FY20-FY22 +67% CAGR
- 37. IN 2019, #2 IN OVERALL VC SYSTEMS REVENUE Competitor A 50% 40% 30% 20% 10% 0% Logitech Competitor B Competitor C Competitor D 15% 2019 Note: Figures based on Synergy Research.
- 38. FROM SMALL PLAYER TO NEARLY 1/3RD OF OVERALL VC MARKET IN REVENUE 2016 2017 2018 2019 2020 2021 (Q1 - Q3) 4% 40% 30% 20% 10% 0% LOGITECH MARKET SHARE REVENUE 7% 11% 15% 25% 31% Note: Rounded figures based on Synergy Research.
- 39. IN 2021, TIED FOR #1 OVERALL REVENUE Competitor A 50% 40% 30% 20% 10% 0% Logitech Competitor B Competitor C Competitor D 2019 2021 31% Note: Figures based on Synergy Research.
- 40. 1 OUT OF EVERY 2 VC ROOMS WW ON LOGI Note: Figures based on Synergy Research. LOGITECH PERCENTAGE OF MEETING ROOM INSTALLS 2021 Q3 Logitech 48% Competitor 1 15% Competitor 2 8% Competitor 3 8% Competitor 4 5% Rest of Market 16%
- 41. WE LEAD ROOM USB/CLOUD INSTALLS, WHERE THE MARKET IS GOING 2016 2017 2018 2019 2020 2021 (Q1 - Q3) 80% 60% 40% 20% 0% Note: Figures based on Synergy Research. LOGITECH USB DEVICE MARKET SHARE
- 42. LOGITECH’S INNOVATION PIPELINE IS ROBUST
- 43. RALLY BAR & RALLY BAR MINI
- 44. SCRIBE: BRINGING THE WHITEBOARD INTO VIDEO MEETINGS
- 45. LOGI DOCK: THE PERFECT PRODUCT TO SIMPLIFY THE HOME OFFICE & HYBRID WORK
- 46. LOGI DOCK: THE PERFECT PRODUCT TO SIMPLIFY THE HOME OFFICE & HYBRID WORK
- 47. RIGHTSIGHT 2.0: ADDING AI FOR THE BEST VIEW
- 48. LOGITECH SYNC: RAPID ENTERPRISE ADOPTION 25,000+ March, 2020 March, 2022 1,200
- 49. ADDING PERSONAL DEVICES FOR LOGITECH SYNC
- 50. LOGITECH SELECT: DISRUPTIVE ARR SERVICES
- 51. WHY WE'RE POSITIONED TO WIN SECTION THREE
- 52. 4SHIFT FROM PRODUCTS TO SYSTEMS Scheduler Control Hubs Accessories Front Camera Whiteboard Camera Remote Management
- 53. WE’VE BUILT OUT OUR GLOBAL GO-TO-MARKET TEAM SMALL NUMBER OF VC SPECIALISTS SALES GENERALISTS Startup Conglomerate … AND BUILDING ENTERPRISE SALES… GLOBAL TEAM OF COLLABORATION SPECIALISTS
- 54. BEST POSITIONED TO WIN Hybrid Work creates challenges (but also opportunities) Complexity requires move to software and systems Video is here to stay, way more growth ahead Logitech is positioned to win Tripled category and increased market share Largest market share and installed base With the most innovative portfolio and dedicated GTM
- 56. We help ALL people create, communicate, learn and work in the digital world.
- 57. +5% NET SALES CAGR OUR C&P CATEGORY WAS GROWING All data is for cordless and corded: keyboards, combos, mice, trackballs, trackpads, presenters *Source: GFK/NPD NET SALES GROWTH USD +6% +3% +6% FY17 FY18 FY19 GROWING SALES IN A GROWING MARKET WHERE WE’RE GROWING SHARE LOGI SHARE* 42% LOGI SHARE* 43% LOGI SHARE* 44%
- 58. THEN WE CHANGED OUR APPROACH
- 59. NOW WE DESIGN AROUND EACH AUDIENCE
- 60. NOW WE DESIGN AROUND EACH AUDIENCE
- 61. 61 OUR “EACH-AUDIENCE” APPROACH UNLEASHES ACCELERATED GROWTH All data is for cordless and corded: keyboards, combos, mice, trackballs, trackpads, presenters *Source: GFK/NPD NET SALES GROWTH USD +4% +31% +25% FY20 FY21 YTD FY22 GROWING SALES IN A GROWING MARKET WHERE WE’RE GROWING SHARE LOGI SHARE* 46% LOGI SHARE* 49% Double-digit H2 FY20 sell-thru LOGI SHARE* 50% + 27% NET SALES CAGR
- 62. THE FUTURE IS FULL OF OPPORTUNITY + MORE PEOPLE + MORE DIGITAL ACTIVITIES & OPPORTUNITIES E.G. METAVERSE + MORE SPACES
- 63. MACRO TRENDS WILL DRIVE OUR GROWTH AHEAD WORK & LEARN FROM ANYWHERE 1 NEW DIGITAL WORKER & CREATOR JOBS 2 CHINA & EMERGING MARKETS 3 WELL-BEING AT WORK 4
- 64. OUR CAPABILITIES ALSO DRIVE GROWTH B2B OPPORTUNITY (WIRELESS ADOPTION) 1 SUSTAINABILITY 2 NEW AUDIENCES 3
- 65. GROWTH UPON GROWTH, WITH LOGI IN THE DRIVER’S SEAT MACRO TRENDS Market today Market tomorrow LOGI CAPABILITIES LOGI SHARE GAIN
- 66. 5 WAYS TO TAKE ADVANTAGE OF THE OPPORTUNITY DIFFERENT FOR EACH AUDIENCE PEOPLE- CENTERED INNOVATION BRAND & CUSTOMER LOYALTY CHINA & B2B SUSTAINABILITY
- 67. We’re doing it already. Here’s how...
- 68. WHERE THERE’S A WORKSPACE, THERE’S A WORKPLACE IMPACTING OFFICE LAYOUT & DECISIONS PEACE OF MIND & SECURITY FOR THE I.T. MANAGER THE RIGHT CHOICE FOR EACH EMPLOYEE, ACROSS ALL WORKSPACES HOTDESK/SHARED WORKSPACE HOME/REMOTE WORKSPACE DEDICATED OFFICE WORKSPACE
- 69. LOGI BOLT FOR BUSINESS MX Keys Mini for Business ERGO K860 for Business MX Keys for Business ERGO M565 Trackball for Business Logi Bolt USB Receiver MX Anywhere 3 for Business MX Master 3 for Business NEXT-GEN WIRELESS TECHNOLOGY FULL ENCRYPTION & SECURE & ROBUST CONNECTIONS CONNECT YOUR WAY NEW OPTIONS+ SOFTWARE WORKS WITH ALL OS & SCREENS
- 70. SIGNATURE M650 WIRELESS MOUSE A FIT FOR EVERY HAND SCROLL SMARTER SILENT TOUCH TECHNOLOGY CONNECT YOUR WAY MADE WITH RECYCLED PLASTIC NEW OPTIONS+ SOFTWARE WORKS WITH ALL OS & SCREENS
- 71. MX & THE GROWING CREATORS WORKFORCE MILLIONS OF CREATORS…AND GRAPHIC DESIGNERS, AND VIDEO EDITORS, ARCHITECTS, PHOTOGRAPHERS, SOFTWARE DEVELOPERS, ENGINEERS….
- 72. LOGITECH MX LINE-UP SCROLL & TYPE SMARTER TRACK EVERYWHERE CONNECT YOUR WAY WORK ANYTIME NEW OPTIONS+ SOFTWARE SMART CUSTOMIZATION, PRE-DEFINED PROFILES WORKS WITH ALL OS & SCREENS FY20 FY21 YTD FY22 MX LINE-UP NET SALES GROWTH +26% +85% +53%
- 73. LOGITECH POP KEYS & POP MOUSE UNLIMITED SELF-EXPRESSION EMOJI KEYCAPS CONNECT YOUR WAY WORKS WITH ALL OS & SCREENS
- 75. A SOLUTION FOR ALL PEOPLE’S WORKSPACES GROW TO A $1000 ADVANCED CREATOR WORKSPACE DISCOVER LOGI WITH A $20 MOUSE Simple & Intuitive The right fit for all Works on all X-OS Sustainable
- 76. CREATIVITY & PRODUCTIVITY IS… A GROWTH CATEGORY THAT HELPS ALL PEOPLE WITH IMPACTFUL INNOVATION GLOBAL OPERATIONAL EXCELLENCE
- 78. z MARKET TRENDS & FOCUS AREAS
- 79. KEY TRENDS & OPPORTUNITIES 1 2 3 4 GAMING IS A MASS ENTERTAINMENT & SOCIAL ACTIVITY ESPORTS CONTINUES TO GROW CLOUD GAMING WILL EXPAND THE MARKET GAMING IS DRIVING THE METAVERSE
- 80. Source: Newzoo 2022 3.1B 2020 2.8B 2019 2.6B 2023 3.2B 2024 3.3B 2021 3.0B Gamers = anyone who plays games on any major platform: PC/Console/Mobile (which individually are also forecast to grow) 1GAMING IS A MASS ENTERTAINMENT ACTIVITY WORLDWIDE GAMERS SET TO PASS 3 BILLION Number of worldwide gamers 2020-2024, unit: billion
- 81. Source: Stream Hatchet | Video Game Streaming Trends Report, 2021 GAMING IS INCREASINGLY BECOMING A FORM OF ENTERTAINMENT, PARTICULARLY FOR YOUNG GAMERS 25% Video Games 18% Social Networks 17% 15% 14% Streaming Movies Watching TV Listen to Music 15.8B 28.7B 34.6B 1GAMING IS A MASS ENTERTAINMENT ACTIVITY 11% Reading 2021 2019 2020 Game Livestreaming is Mainstream and Growing YoY Hours Watched (billion hours) Gen Z Prefers Gaming Over Social Networks, Movies & Music Choice of Favorite Entertainment Activity Source: Newzoo | How different generations engage with gamers: CI Games & Esports
- 83. Esports Revenue Growth Global USD (Millions) Sponsorship $640 Media Rights $195 Game Publisher Fees $130 Merchandise & Tickets $65 Streaming $22 Digital $33 $1,084 Sponsorship $922 Media Rights $259 Game Publisher Fees $162 Merchandise & Tickets $178 Streaming $32 Digital $49 $1,618 2ESPORTS CONTINUES TO GROW ESPORTS MARKET PROJECTED TO GENERATE $1.6B REVENUE BY 2024E 2024e 2021 Source: Newzoo Global Esports and Streaming Market Report 2021
- 84. 2ESPORTS CONTINUES TO GROW Occasional Viewers 240M Esports Enthusiasts 234M Occasional Viewers 292M Esports Enthusiasts 286M Source: Newzoo GLOBAL ESPORTS AUDIENCE WAS 474M IN 2021 Esports Viewership Global Audience (M) and YoY Change 474M 577M 2024e 2021 Source: Newzoo: How different generations engage with gamers
- 87. ● Instantaneous access to deep game libraries ● Ability to play high-end games on low-end machines ● Seamless play between console, PC, and mobile ● Will drive need for peripherals to access and play AAA games Source: Newzoo Global Cloud Gaming Report 2023 48.6M 2022 34.9M 2021 23.7M 2020 13.5M 60.7M 2024 3CLOUD GAMING WILL EXPAND THE MARKET 2019-2024 +35% CAGR CLOUD GAMING EXPECTED TO GROW FROM 34.9M PAYING SUBSCRIBERS IN 2020 TO 60.7M BY 2024 Number of registered users of cloud gaming platforms 2020-2024, unit: million
- 88. Source: Logitech G research: Future of Gaming and Cloud 3CLOUD GAMING WILL EXPAND THE MARKET Full experience > 2hrs Immersive Gaming Deeper experiences, AAA games and specialized gaming gear Graze 20mins - 2hrs Cloud Gaming New entrants that want to access AAA games on lower cost devices Snack < 20mins Mobile Gaming Need for immediacy and short gaming experiences
- 90. “If web developers are the architects of the internet as we know it (Web 2.0), then game developers are the architects of the metaverse – Web 3.0.” Crucible’s CEO and Co-Founder, Ryan Gill 4GAMING IS DRIVING THE METAVERSE GAME DEVELOPERS AND CONTENT CREATORS ARE LEADING THE WAY Source: Newzoo Global Games Market Report 2021
- 91. Interest in the metaverse increases intent to start playing games of non-gamers indicate they will play games in the future More broadly, all consumers agreed that participation in the metaverse would increase their game play If you were to start socializing in game-worlds, how would it affect how much you play games overall? 70% 28% Play More The Same Play Less 77% 4GAMING IS DRIVING THE METAVERSE THE METAVERSE WILL ATTRACT NEW GAMERS AND EXISTING GAMERS WILL PLAY MORE Source: Newzoo Global Games Market Report 2021, consumers aged 14-50
- 92. Ariana Grande concert in Fortnite by Epic Games Gaming avatars and our gear will be the keys to access, interact & create in the Metaverse
- 93. In the future our gear might also detect when you’re in the zone or need a break In the future our gear might also detect when you’re in the zone or need a break YOU ARE IN THE ZONE TEAM COMMS MONITORING
- 94. Gaming is a mass entertainment & social activity 1 Esports continues to grow 2 Cloud Gaming will expand the market 3 Gaming is driving the Metaverse 4
- 97. BORN IN A WORLD WHERE EVERYONE CREATES CONTENT GEN Z ARE THE FIRST GENERATION
- 98. CREATORS ARE THE MOST INFLUENTIAL PEOPLE OF THE NEXT DECADE Hundreds of millions of “shows” that cater to billions. FUTURE PAST Hundreds of TV shows consumed by billions. MEDIA COMPANIES CREATORS
- 99. INFLUENCER MARKETING RAPIDLY EXPANDING Sources: Influencer Orchestration Network, Influencer Marketing Industry Expected To Be Worth $13.8 Billion This Year. www.ion.co/influencer-marketing-industry-to-reach-13-8-billion-in-2021; Markets and Markets report - Influencer Marketing Platform Market, Dec. 2020 2016 2021 $1.7B REVENUE $13.8B REVENUE +52% CAGR
- 100. https://www.campaignlive.com/article/direct-to-fan-marketing-skyrockets-consumers-pay-creators-directly/1731143 40% OF CONSUMERS ARE ALREADY PAYING CREATORS DIRECTLY New Donation Ariana Barros donated $45
- 101. CREATOR ECONOMY www.theinformation.com/articles/how-creator-economy-investments-could-hit-5-billion-this-year CHASING THE CREATOR ECONOMY The % of total funding for creator economy startups by subsector VC INVESTMENTS HIT $5B IN 2021 50% 40% 30% 20% 10% 0% EDUCATION SOCIAL MEDIA GAMING MUSIC CRYPTO SHOPPING CREATOR PLATFORM CREATOR SERVICES Q2 Q3
- 102. PLATFORMS ARE CREATING BILLION DOLLAR FUNDS FOR CREATORS $1 BILLION FACEBOOK $1 BILLION TIKTOK $100 MILLION YOUTUBE $ MILLIONS /MONTH SNAP $25 MILLION LINKEDIN
- 103. https://www.cnbc.com/2021/04/27/zuckerberg-announces-new-ways-for-instagram-creators-to-make-money.html CREATOR MONETIZATION IS SPREADING… https://www.tubefilter.com/2021/12/07/discord-premium-memberships/ https://techcrunch.com/2021/02/25/twitters-super-follow-creator-subscription-takes-shots-at-substack-and-pa treon/ https://www.theverge.com/2021/12/1/22811973/tiktok-creator-next-monetization-t ips-video-gifts
- 104. Creator economy is booming 1 Creators need help to make it a career 2 Diversification of creator monetization 3 Shift from products to solutions 4 MARKET TRENDS & CREATOR OPPORTUNITY
- 105. EMERGENCE OF CREATORS AS BUSINESSES 1 Create Content Grow Your Audience 2 3 Own Your Audience 4 Monetize Online Monetize Offline 5 6 Manage Your Business
- 107. Hardware | Software Hardware & Software creator products creator studios FROM PRODUCTS TO STUDIOS
- 108. Insert lifestyle picture here DEDICATED STUDIO
- 109. Insert lifestyle picture here ANYWHERE STUDIO
- 111. READY FOR CLIENT REVIEW WE MAKE THE TOOLS, YOU CHANGE THE WORLD.
- 113. OPERATIONS UPDATE
- 114. ANOTHER YEAR OF OPERATIONAL EXECUTION DESIGN AND PRODUCT QUALITY EXCELLENCE Record volumes shipped Diversified and automated manufacturing Delivered nearly 40 new products Availability aided market share gains
- 115. COST OPTIMIZED Global Suppliers Thousands of parts, Hundreds of major suppliers Global Manufacturing Owned & outsourced Large volume; 200M+ Units Global Distribution Reaching 80 countries 200K M3 shipped per year Customers & Channels Millions of consumers Direct, Disti, B2B, .com HIGH QUALITY OUR OPERATIONS ARE DIVERSE, GLOBAL, AND RESILIENT DELIVERING SUSTAINED PROFITABLE GROWTH DIVERSE PORTFOLIO
- 116. CONTINUOUS COVID-RELATED DISRUPTIONS Tough component market Port congestion and longer shipping times Inflation Demand variability in our categories CHALLENGING MACRO ENVIRONMENT
- 117. OPERATIONAL CAPABILITIES HAVE ENABLED US TO BE RESILIENT FLAT & ADAPTIVE CULTURE Margin assurance design for cost Competitive diversified manufacturing Closed loop product quality Customer centric supply chain value DIVERSE TALENT
- 118. SUSTAINABILITY
- 119. Sustainable brands grow faster Consumers voting with their dollars Climate risk is investment risk WHY DOES SUSTAINABILITY MATTER TO YOU? BRANDS THAT ARE UNIQUELY POSITIONED TO DEMONSTRATE THE BUSINESS VALUE OF SUSTAINABILITY WILL THRIVE
- 120. Help ALL people pursue their passions by designing experiences so everyone can create, achieve, and enjoy more…and in a way that is good for the environment.
- 121. A CLIMATE POSITIVE COMPANY 1.5 Climate Pledge 2019 Carbon Labels 2020 Carbon Neutral 2021 Climate Positive 2030+
- 122. RETHINKING BUSINESS OUR CLIMATE POSITIVE STRATEGY Design for Sustainability (DfS) to achieve ambitious carbon reductions in our products, operations and supply chain Drive ambitious uptake of renewable electricity in our own operations and supply chain Adopt a climate positive approach to restore forestry and climate impacted communities and catalyze carbon removals REDUCE RENEW RESTORE
- 123. OUR GOAL IS TO LEAVE A ZERO FOOTPRINT & GO BEYOND
- 124. INCREASING SUSTAINABILITY, DECREASING CARBON 2021 BY THE NUMBERS RECYCLED PLASTIC (POST-CONSUMER) devices using PCR 62M virgin plastic eliminated >8,000t plastics are PCR across total portfolio >1/3 PCR used in C&P mice and keyboard 65% conflict mineral free 100% FSC certified materials used in packaging >1450t PVC free packaging 100% water-based paints >90% MATERIALS RENEWABLE ENERGY renewable energy used worldwide >92% Since 2019: 24% improvement in carbon intensity while continuing to grow 20% reduction of carbon per a dollar of revenue since CY’19, while continuing to grow Carbon neutral across entire footprint
- 125. REDUCING CARBON WHILE DELIVERING NEW & BETTER EXPERIENCES POP MOUSE 18% ● Recycled plastics ● Designed for recyclability ● Zero single use plastic packaging G435 LIGHTSPEED WIRELESS GAMING HEADSET 40% ● Recycled plastics ● Lightweight product architecture ● Optimization of PCB size MX KEYS MINI 10% ● Recycled plastics ● Weight reduction ● Packaging optimization Carbon savings vs. baseline product Design Principles
- 126. PACKAGING THAT IS BETTER FOR THE PLANET OUR GOAL ● No single use plastics ● FSC certified paper ● No PVC ● Smaller better packaging Eliminated 5.6 million plastic bags during shipping Eliminated 5.8 million plastic bags inside packages Eliminated >1.1 million plastic clamshells Plastic bag protection Tissue paper protection
- 127. First consumer electronics company to commit to providing detailed carbon impact labeling on product packaging across the entire portfolio. CARBON IS THE NEW CALORIE
- 128. Verified Logitech G304 Lightspeed Gaming Mouse* 8.76 Logitech G213 RGB Prodigy Gaming Keyboard* 22.0 Logitech G903 Lightspeed Gaming Mouse* 8.64 Logitech G502 Hero Gaming Mouse* 7.10 Logitech G502 Lightspeed Gaming Mouse* 8.69 Logitech G PRO Wireless Gaming Mouse* 7.84 5.51 kg CO2 e Logitech G102 Lightsync Gaming Mouse* kg CO2 e kg CO2 e kg CO2 e kg CO2 e kg CO2 e kg CO2 e 1.62 7.14 2.11 G432 Surround Sound Wired Gaming Headset H151 Stereo Headset H111 Multi-Device Headset 1.73 M100 Corded Mouse 4.02 M100 K120 Keyboard Mouse 5.03 MK120 Combo 5.35 H390 USB Computer Headset kg CO2 e kg CO2 e kg CO2 e kg CO2 e kg CO2 e kg CO2 e kg CO2 e * In Stores already CARBON LABELED PRODUCTS DOING AS WE PLEDGED
- 129. AWARDS AND ACKNOWLEDGEMENTS “GOLD” RATING LISTED LISTED “AA” RATED* LISTED CLIMATE LEADER SDG2000 LISTED 2020 OVERALL WINTER IN CONSUMER TECHNOLOGY CATEGORY 2021 HONOREE *The use by Logitech of any MSCI ESG Research LLC or its Affiliates (“MSCI”) data, and the use of MSCI logos, Trademarks, Service Marks or Index Names Herein, do not constitute a sponsorship, endorsement, recommendation or promotion of Logitech by MSCI. MSCI Services and data are the property of MSCI or its information provides, and are provided ‘As-Is’ and without warranty. MSCI names and logos are trademarks or service marks or MSCI.
- 130. OPERATIONAL EXCELLENCE Resilient operations Sustained profitable growth & operating leverage PERVASIVE SUSTAINABILITY ACROSS LOGITECH PATH TO CLIMATE POSITIVE High quality, cost optimized & cutting edge product operations Amazing experience for consumers, enterprises and customers Agile customer centric supply chain Growth and market leadership
- 132. Growing markets Leadership position in design and innovation Operational excellence WE’RE FOCUSED ON THE CATEGORIES AND CAPABILITIES THAT MATTER
- 133. CONFIRM FISCAL YEAR 2022 OUTLOOK Sales (CC) Growth Non-GAAP operating income 2% – 5% $850M – $900M FY 2022 Note: Figures are non-GAAP and sales growth is in constant currency (cc) Note: See the Forward-Looking Statements for factors that could cause actual results to differ materially from the guidance presented..
- 134. TARGETED INVESTMENTS WITH CLEAR OBJECTIVES GROWTH OPPORTUNITY Higher ASP Across Larger TAM New Users, Sell Whole Portfolio Enterprise Sales Adjacent Categories INVESTMENTS Research & Development Marketing/Brand Campaigns B2B Sales Coverage & Tools Expand Portfolio INTENDED RESULTS Differentiated Products Awareness & Consideration Expand B2B Market Share Top Line Growth
- 135. NAVIGATING THROUGH FY 2023 Headwinds Tailwinds Inflationary environment persists Past experience leads to successful execution of promotional and pricing strategy Unpredictable supply chain environment causes shortages, delays, increased logistics costs Investments in multi-sourcing and strategic capacity agreements provide competitive advantage Slowdown in gaming as other forms of entertainment recover Growth in esports, Cloud and social gaming Increased competition due to expanded market opportunities Product portfolio and marketing investments for hybrid work environment Marketing investments don't offset need for promotions Marketing investments drive greater brand awareness and consideration
- 136. $151M Mergers & Acquisitions $579M Share Buybacks $430M Dividends NO CHANGE IN CAPITAL ALLOCATION STRATEGY MORE THAN $1B IN SHARE BUYBACKS AND DIVIDENDS OVER LAST 3 YEARS Note: Totals above represent cumulative over prior three (3) years. Note: Share buybacks are through 2/24/2022.
- 137. FISCAL YEAR 2023 OUTLOOK Sales (CC) Growth Non-GAAP operating income FY 2023 OUTLOOK Mid Single Digits $900M – $950M ADDITIONAL ASSUMPTIONS Currency Non-GAAP effective tax rate Cash from operations Capex Note: Figures are non-GAAP and sales growth is in constant currency (cc). OP = operating profit. Note: See the Forward-Looking Statements for factors that could cause the actual results to differ materially from the guidance presented. Current Rates Approximately 13% 1x non-GAAP OP Approximately $115M
- 138. FISCAL YEAR 2023 CATEGORY GROWTH EXPECTATIONS MAJOR CATEGORY (CC) GROWTH Creativity & Productivity Video Collaboration Gaming Music 0% – 10% 5% – 15% 0% – 10% (15%) – (5%) Note: Net sales figures are Y/Y. (CC) = constant currency. Creativity & Productivity includes pointing devices, keyboards and combos, PC webcams, tablets and accessories. Music includes mobile speakers and Audio & Wearables.
- 139. READY FOR DESIGN LONG-TERM MODEL Sales (CC) Growth Gross Margin Operating Margin Up 8 – 10% 39 – 44% 14 – 17% CONFIRM Note: Figures are non-GAAP and sales growth is in constant currency (cc).
- 140. READY FOR DESIGN LONG-TERM MODEL Sales (CC) Growth Gross Margin Operating Margin Up 8 – 10% 39 – 44% 14 – 17% OUR LONG TERM MODEL… FY 2027 Sales FY 2027 Operating Profit $7.7 – $8.4B $1.1 – $1.4B IMPLIES IN 5 YEARS… Note: Figures are non-GAAP and sales growth is in constant currency (cc). Note: Time period covers FY23 guidance plus four (4) years of LTM growth.
- 141. LONG-TERM MODEL Note: Figures are non-GAAP. … A CATEGORY GROWTH SCENARIO COULD BE: Creativity & Productivity Video Collaboration Gaming Music 8% 14% 9% -10% $7.7 – $8.4B $1.1 – $1.4B FY 2027 Sales FY 2027 Operating Profit Note: Growth rates are FY22 - FY27 CAGR (CC) TO ACHIEVE THIS IN 5 YEARS…
- 142. LONG-TERM MODEL ANNUAL REVENUE GROWTH (PRE-PANDEMIC) Logitech Net Sales FY 2016 - FY 2020 Sales Growth (CC) 9% 10% 13% 15% 9% $3,000M $2,500M $2,000M $1,500M $1,000M FY20 FY19 FY18 FY17 FY16 $3.0B $2.8B $2.6B $2.2B $1.9B AT OR ABOVE LONG-TERM MODEL