SYNNEX Corporation · End -to-end marketing Enterprise and Specialty Distribution (Value Add) ......
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SYNNEX Corporation Investor Deck January 9, 2014
Transcript of SYNNEX Corporation · End -to-end marketing Enterprise and Specialty Distribution (Value Add) ......
SYNNEX Corporation
Investor Deck
January 9, 2014
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Safe Harbor
Statements in this presentation regarding SYNNEX Corporation, which are not historical facts may be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements may be identified by terms such as believe, expect, may, will, provide,
could and should and the negative of these terms or other similar expressions. These forward looking statements
include, but are not limited to, statements regarding our anticipated acquisition of IBM CRM business, including the
anticipated benefits and timing of the closing, our strategy, including growth, margins, profitability and returns,
expectations of our revenues, net income and diluted earnings per share, our performance, benefits of our business
alliances, benefits of our business model, our competitive position, our expectations for our operating margins,
profitability, ROIC, and market conditions and trends. These are subject to risks and uncertainties that could cause
actual results to differ materially from those discussed in the forward-looking statements. Please refer to the documents
filed with the Securities and Exchange Commission, specifically our most recent Form 10K and 10Q, for information
on risk factors that could cause actual results to differ materially from those discussed in these forward
looking statements. Statements included in this presentation are based upon information known
to SYNNEX Corporation as of the date of presentation and SYNNEX Corporation
assumes no obligation to update information contained in this presentation.
NYSE:SNX
#262 in Fortune 500
>30 Years of Operating History
106 Consecutive Quarters of Profitability
~14,500 Employees Worldwide
Distribution and GBS Operating Segments
Seasoned Executive Team Average 20+ years in
tech/channel
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Integrated Suite of Services
for the Technology Industry
BPO
Demand generation
Tech/customer support
Supply chain management
Contract assembly
Broadline & Value Add
Distribution
Services
Supply Chain Mgmt,
Reverse Logistics
Contract Assembly
Direct Sales
Cross-sell/Up-sell
Tech/Customer Support
Global Business
Services (GBS)
SYNNEX
Supply-chain management reduces manufacturer’s
inventory and improves time-to-market
Demand generation enhances manufacturers’
go-to-market strategies
End Users
Consumers
SMB
Corporate
Gov’t
20,000 +
Resellers /
System Integrators
Retailers /
DMRs
Supply Chain
Management
Design
Services
Assembly
And Test
Differentiation Within Technology Distribution … Channel Solutions Beyond Technology Distribution
Hybrid Solutions Distribution spans spectrum of value
and volume distribution
One-stop shop for CE and IT resellers
Efficient go-to-market engine for manufacturers
Design and assembly services
Technical support
SYNNEX Hybrid
Solutions Distribution
Cross-sell/Up-sell
Direct Sales
Tech/Customer Support
SYNNEX Differentiators Integrated Suite of Services for
the Technology Industry
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Distribution Evolving Value
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Credit
Pick, Pack
and Ship
The Early Days of
Moving Boxes
Enhanced
Logistics
Electronic
Tools
Time and Place
Delivery
Enhanced
Financial
Services
Configurators
Storefronts
Communities
Training and
Professional
Services
Advanced
Enablement
Business
Platform Tools
Software-
Driven
Vertical
Solutions
Solution-
Driven
Distribution
SYNNEX Differentiators
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SYNNEX’ Hybrid Distribution Model
Converged Solutions Distribution
End User Customer Spectrum
Traditional VAR Traditional SVAR
End User Customer Spectrum
Broadline
Distribution
(Volume)
Speed/Velocity
Transactional
Low SG&A
Price sensitive
Market growth
Product growth
Enterprise
Distribution (Value)
Technical support
Integrated solutions
Average selling price
Higher gross margins
Services content
Solution focus
Hybrid Distribution Model
Converged Solutions
(Leveraging Best of Both)
Segmented organization
Leverage low cost back office/room
Complete solutions, enterprise and broadline
End-to-end marketing
Enterprise and
Specialty Distribution (Value Add)
Dedicated resources
Design and Technical support
Integrated solutions
Higher gross margins
Services content
Vertical and Solution focus
Broadline
Distribution
(Volume)
Speed/Velocity
Transactional
Low SG&A
Price sensitive
Time and place delivery
Focused line card
Traditional VAR Traditional SVAR Converged Solutions Reseller
Traditional VAR Traditional SVAR
SYNNEX Differentiators
Investing in Value Added
Solutions
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Vertical Practices Technology Practices
Channel Solutions for Real Business Challenges
SYNNEX Differentiators
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Customized
Datacenters
• Collaboration
• Efficient Supply Chain
• “One-Stop Shop”
• Technical & Testing Expertise
• Design Expertise
• Experience
• Social Networking
• Cloud
• Power Efficiency
Winning Customized Solutions With Integration
of Hardware, Software and Services
SYNNEX Differentiators
Resellers Reduce Complexity by Deploying the CLOUDSolv
Platform as Their Cloud Business Platform for SMB Customers
Marketplace
Operations
Solutions
Hosting
Plan + Pilot Assessments
Procure + Provision Consolidated purchasing and provisioning
Integrate + Deploy Migrations Upgrades
Support + Manage Support Services Managed Services
SYNNEX Differentiators CLOUDSolv
RFID Tag
Connect Connected people, workforce and devices
MOBILITYSolv Enables End-to-End Enterprise Mobility (MDM, BYOD and M2M)
Wired, WiFi, RFID, Mobile
WAN Move Push and pull information across the enterprise
MaaS, RaaS, RitC, MDM Services
Control Control, manage and secure
SYNNEX Differentiators MOBILITYSolv
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Global Business Services (GBS) Segment
BPO Strategy
SYNNEX Differentiators
Help our clients
Acquire, Support and
Renew their
customers through
Proprietary Platforms
& Best in Class Tech
Support Services
On 9/10/2013 SYNNEX and IBM announced a definitive agreement by which SYNNEX
will acquire IBM’s ~$1.2 billion worldwide customer care outsourcing business
$505M purchase price ~ 4 X estimated EBITDA of $120M in year one
IBM’s CRM business will be combined with Concentrix, a wholly-owned subsidiary of SYNNEX,
to become one of the world’s foremost customer engagement outsourcing companies in the
$55 billion+ CRM BPO market
IBM’s CRM business services ~170 clients in over 40 languages through over 40 delivery
centers on six continents
SYNNEX will enter into a multi-year agreement whereby Concentrix will become an IBM
strategic business partner for global customer care business process outsourcing services
Initial close expected to occur in the first calendar quarter of 2014, subject to customary
closing conditions and satisfaction of domestic and foreign regulatory requirements/approvals
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Transaction Overview
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SYNNEX
Revenue Growth(2) Operating Margin(2)
(1) Fiscal Year 2012 revenue growth was 2.7% excluding the impact of the transition of a certain customer contract from gross
revenue to fee for service.
(2) Fiscal Year Ended 11/30; Revenue CAGR and Operating Margin improvement calculated on full years 2008-2013;
Operating Margin attributable to SYNNEX from Continuing Operations. Fiscal year 2013 operating margin excludes $8.4M
acquisition expenses and integration charges primarily related to our announced acquisition of the IBM CRM unit.
Shifting Mix to Value-Added Higher Margin Business Through Investments in
Both Disti and GBS Segments
$M
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
2008 2009 2010 2011 2012 (1) 2013
1.00%
1.50%
2.00%
2.50%
3.00%
2008 2009 2010 2011 2012 2013
Investing in Mix Shift to Higher Margin
Segments Drives EPS and ROIC Growth
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(1) Fiscal Year Ended 11/30; EPS CAGR and ROIC improvement calculated on full fiscal years 2008-2013.
ROIC(1,2)
SYNNEX
(2) ROIC %’s = fiscal trailing four quarters. 2013 ROIC % excludes $8.4mil in acquisition & integration expenses.
EPS Trend(1,3)
Trend(1
(3) FY13 EPS excludes $0.16 impact from acquisition expenses and integration expenses, and a one time numerator adjustment resulting
in $0.97 dilution for convertible senior notes settlement.
$1.00
$2.00
$3.00
$4.00
2008 2009 2010 2011 2012 2013(3)
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
2008 2009 2010 2011 2012 2013
Continued Excellent Track Record 106 consecutive quarters of profitability
Record revenues in both Distribution and GBS segments
Trailing four quarter ROIC of 9.4% (9.7% excluding IBM acquisition costs)
Proven execution in both rising and falling demand environments
Consistent Results in a Tough Macro-environment
US Distribution organic revenue growth from market share gains
Above market revenue growth in GBS segment (4Q13 = 11%; FY13 = 13%)
Focus on operating margins while continuing to invest in the higher growth, higher margin Distribution segments and GBS sales cycle
Strong Balance Sheet and Liquidity (as of 11/30/2013)
Debt to capitalization of 18%
Excellent liquidity: ~$1 billion in cash/credit facilities to fund growth and IBM acquisition
FQ4 2013 Highlights
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Exceptional Core Business (Distribution segment)
Low cost leader in the industry; Focused geographies
Competitive differentiators such as proprietary ERP system
Consistent, excellent financial performance
Differentiated Hybrid Distribution Model Moving up the value chain in services, solutions & support
Investing in high growth, high margin tech segments
Fast Growing CRM BPO Services Business (GBS segment)
Expanding GBS-BPO with platform BPO solutions
>1,000 headcount added in 3Q13 due to recent contract wins/renewals
IBM acquisition adds to GBS’ strong margin profile with significant cash flow
generation; supportive of long-term ROIC goals
Growing Margins, EPS and ROIC Driving profit expansion from prior/current acquisitions
IBM year one EBITDA of $120M adds >40% to current SNX EBITDA
Increasing revenue in high-growth adjacent markets
More Opportunities Ahead
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Investment Summary
