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LOGITECH INTERNATIONAL S.A.

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Logitech International S A : Q3 2022 Prepared Remarks

01/25/2022 | 03:27am EDT

Logitech Q3 Fiscal Year 2022 Financial Results

Management's Prepared Remarks (January 24, 2022)

Logitech is posting a copy of these prepared remarks, our press release, and accompanying slides to our investor website. These prepared remarks will not be read on the videoconference. We refer to non-GAAP financial measures herein. For full GAAP to non-GAAP reconciliation information and cautionary information regarding the use of non-GAAP measures, please refer to "Supplemental Financial Information" in our earnings press release posted to our website under "Quarterly Results" at http://ir.logitech.com. The live webcast or replay of the question and answer session will also be available on our website.

COMPANY COMMENTARY

Following is a summary of the company's comments on key areas impacting Q3 Fiscal Year 2022. The growth percentages that follow are in comparison to the same period of the prior year, except as otherwise specified. In addition, sales are net sales and the sales growth percentages are for net sales and in constant currency, except as otherwise specified.

OVERVIEW

Q3 sales declined 2% to $1.6B. This performance nearly sustains last year's record Q3 sales which grew 80% in constant currency, with strong growth in Pointing Devices, Keyboards and Combos and Gaming, and share gains in the majority of key categories. Q3 non-GAAP gross margin was 40.6%, down as anticipated from last year's elevated levels, and remained within our target range. Non-GAAP operating profit in Q3 was $302M, and non-GAAP earnings per share was $1.55, both down 37% versus Q3 last year. The decline in profits reflects the Company's planned, strategic investments in

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Logitech Q3 Fiscal Year 2022 Financial Results

Management's Prepared Remarks (January 24, 2022)

marketing and innovation to support its expanded long-term market opportunities.

CREATIVITY & PRODUCTIVITY

POINTING DEVICES

Our Pointing Devices category delivered sales growth of 8% in Q3, and gained market share in the quarter. This sales growth was driven by continued demand from hybrid work trends. The performance was broad based, with contribution across both our high-end MX family and our mainstream mice portfolio.

KEYBOARDS & COMBOS

Our Keyboards & Combos sales were up 29% in Q3, its ninth consecutive quarter of double digit growth. This demonstrates the strength and diversity of our product portfolio and the increased demand for tools that enhance productivity, both at home and at work.

PC WEBCAMS

Our PC Webcams sales decreased 12% in Q3, from record sales levels a year ago, and grew market share by more than 10 points over the last three months. We remain focused on driving greater awareness of the better experience provided by an external webcam in order to increase attach rates to the large and growing installed base of monitors and PCs.

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Logitech Q3 Fiscal Year 2022 Financial Results

Management's Prepared Remarks (January 24, 2022)

TABLET & OTHER ACCESSORIES

Sales in our Tablet and Other Accessories category declined 37% in Q3. Excluding Japan, where we had a large education order in the same period last year, our sales grew 21%. Even with the decline this quarter, our tablet category sales are still more than double what they were two years ago, with a strong product portfolio helping to

drive 5 points of share gain in the quarter.

GAMING

Gaming delivered strong 8% growth in Q3, against 73% growth last year. We had impressive share gains in both PC Gaming and Console Headsets. It's been an excellent year for gaming, enabled by a very strong lineup of innovative products, solid marketing execution and our leadership position in the fastest growing categories like wireless mice and keyboards.

VIDEO COLLABORATION

Q3 Video Collaboration sales declined 1% after growing more than 200% in Q3 last year. Quarter over quarter, sales increased 24%. Similar to the first half of the year, conference room cameras and systems led the category performance, growing double digits year over year, while webcams and headsets declined. Regionally, Americas net sales grew while EMEA and APJ declined, but all three regions had sell-through growth .

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Logitech Q3 Fiscal Year 2022 Financial Results

Management's Prepared Remarks (January 24, 2022)

MUSIC

MOBILE SPEAKERS

Our Mobile Speaker sales declined 22% in Q3, as expected, as we are continuing to reallocate our resources to faster growing market opportunities.

AUDIO & WEARABLES

Our Audio & Wearables sales decreased 32% in Q3, as expected. We regularly review our portfolio and redirect resources to new opportunities, and along those lines, we have made a decision to cease future product launches under the Jaybird brand. We remain committed however to developing wireless audio products such as Logitech Zone Wireless and UE Fits.

SMART HOME

Our Smart Home sales declined 57% in Q3, as expected. As we discontinued production of our Harmony remotes, we anticipate sales from our Smart Home category to decline for the remainder of Fiscal Year 2022.

NET RETAIL SALES BY REGION

Our sales grew in the EMEA region, and declined in the Americas and Asia Pacific.

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Logitech Q3 Fiscal Year 2022 Financial Results

Management's Prepared Remarks (January 24, 2022)

  • Americas. Sales in our Americas region were down 5% in Q3, with double digit growth in Video Collaboration and Keyboards & Combos offset by declines in Music categories and PC Webcams.
  • EMEA. Sales in our EMEA region increased 3% in Q3, with solid growth from Pointing Devices, Keyboards & Combos, Gaming and Tablet Accessories partially offset by declines in Music categories and Video Collaboration.
  • Asia Pacific. Sales in our Asia Pacific region decreased 2% in Q3, with strong double digit growth in China offset by declines in Japan, which benefited from a large education order in Tablet Accessories last year. Excluding Japan, Asia Pacific grew double digits versus the prior year. By product, we had strong double digit growth in Gaming, Pointing Devices and Keyboards & Combos.

GROSS MARGIN

Q3 non-GAAP gross margin of 40.6% was down 4.6 points versus last year, but up 3 points versus two years ago, and remained within our target gross margin range of 39%-44%.

As we mentioned the past few quarters, we expect FY'22 non-GAAP gross margins to be down versus last year and lower in the second half of FY'22 versus the first half of the year. Higher freight costs reduced gross margin about 2 points year over year and quarter over quarter. We expect these headwinds to remain factors in Q4 and they are included in our profit outlook.

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Disclaimer

Logitech International SA published this content on 24 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2022 08:26:01 UTC.


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Financials (USD)
Sales 2023 5 556 M - -
Net income 2023 654 M - -
Net cash 2023 1 665 M - -
P/E ratio 2023 13,4x
Yield 2023 2,04%
Capitalization 8 601 M 8 601 M -
EV / Sales 2023 1,25x
EV / Sales 2024 1,11x
Nbr of Employees 8 200
Free-Float 94,7%
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Managers and Directors
Bracken P. Darrell President, Chief Executive Officer & Director
Nate Olmstead Chief Financial Officer
Wendy Becker Chairman
Prakash Arunkundrum VP-New Product Introductions
Neil D. Hunt Lead Independent Non-Executive Director
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