a technology solutions and business services company · corporation as of the date of presentation...
TRANSCRIPT
A Technology Solutions and
Business Services Company
Needham 19th Annual Growth Conference
January 11, 2017
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Safe Harbor StatementStatements 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 business strategy, our investments, our growth, shareholder return, margins, revenues, technology
trends and IT market growth, IoT spending and installs growth, CRM BPO market and growth, our mix shift
to higher margin technology platforms and services, Hyve Solutions and BPO Customer Care adjacent
market growth, core organic growth beyond market growth in Technology Solutions and Concentrix-
focused verticals, our product and service features and capabilities, our target revenue growth range, our
target adjusted operating margin and our financial goals.
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 10-K and Form 10-Q, 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.
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Facts About SYNNEX
2016
Ranked
No. 212
Consecutive,
Profitable
Quarters!
Operate
in 26
Countries
Worldwide
5-Year
CAGR 6.2%>90,000
ASSOCIATES
CELEBRATING
118as of November 30, 2016
2016REVENUE
>$14.1 B
NYSE: SNX
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• A new paradigm for scale
computing, with purpose-
built, large scale data center
solutions
• Hyperscale Factories in the
US and UK
The World’s Largest Data
Center Customers
• Web 2.0/Social Media,
Finance, Entertainment
Design and Deliver Custom, Purpose-Built Servers, Storage, Switches
• Efficient Design, Large Scale and Worldwide Deployment
• Focused Footprint in the US, Canada and Japan
• Represent over 300 of the World’s Leading IT and CE Manufacturers
• 20,000+ Reseller and Retail Customers
Efficient Deployment of Technology and CE Products and Services through Volume and Value-Add Distribution
• 100,000 Associates Worldwide
• 6 Continents
• 40+ Languages
• Among Top 5 Global Business
Services Companies
Priority Verticals: Healthcare and Pharmaceuticals, Banking and Financial Services, Insurance, and Consumer Electronics and Technology
Deliver High-Value Business Services and Solutions for the Customer Relationship Lifecycle
SYNNEX Today
All End Markets, including Public
Sector, Corporate & Enterprise,
SMB and Consumer through
Value Added Resellers and
Retailers
IT Distribution
Markets We Serve
What We Do
What We Look Like
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Financials
5
Contribution from Business Segments – FY 2016Concentrix Operating Income is ~29% of Adjusted Operating Income
Concentrix$1.6B
Revenue Adjusted Operating Income(1)
Technology Solutions
$12.5BConcentrix
$131M
TechologySolutions
$318M
(1) Non-GAAP Measure. See the Appendix to this presentation for Definitions of Non-
GAAP Measures and reconciliation such measures to GAAP.
6
Revenue Growth ($M) Adjusted Operating Margin(1)
(1) Non-GAAP Measure. See the Appendix to this presentation for Definitions of
Non-GAAP Measures and reconciliation of such measures to GAAP.
Record performance in 2016 due to effective
pursuit of growth initiatives in both segment
$10,286$10,845
$13,840$13,338
$14,062
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2012 2013 2014 2015 2016
2.56%2.37%
2.94%3.14% 3.20%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
2012 2013 2014 2015 2016
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Technology Solutions
Revenue Growth ($M) Adjusted Operating Margin(1)
$10,136$10,666
$12,756$11,937
$12,491
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
2012 2013 2014 2015 2016
2.49%
2.26%2.42%
2.56% 2.55%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
2012 2013 2014 2015 2016
Higher Margin Investments in SYNNEX Cloud Strategy
Generating Revenue and Margin Expansion
(1) Non-GAAP Measure. See the Appendix to this presentation for Definitions of
Non-GAAP Measures and reconciliation of such measures to GAAP.
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Concentrix
Revenue Growth ($M) Adjusted Operating Margin(1)
Strategic Acquisitions and Investment in Key Growth
Verticals Uniquely Positions Concentrix on a Global Basis
$160 $189
$1,096
$1,417
$1,588
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2012 2013 2014 2015 2016
6.76%
8.28%8.86%
8.00% 8.27%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
10.00%
2012 2013 2014 2015 2016
(1) Non-GAAP Measure. See the Appendix to this presentation for Definitions of
Non-GAAP Measures and reconciliation of such measures to GAAP.
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(1)Refer to Appendix for calculation.(2)Total liquidity at November 30, 2016 is calculated as the sum of our cash and cash
equivalents, short-term investments and the unused portion of our available borrowing
facilities including any accordion features thereon.(3)Approximate dollar value of shares that may yet be purchased under the Program
Strong Balance Sheet and Cash Flow Generation Creates Financial Flexibility
As of November 30, 2016
Cash, Cash Equivalents, Short-Term Investments $392M
Working Capital Velocity(1) 9X
Total Liquidity(2) $1.1B
TTM Operating Cash Flow $326M
Total Borrowings $964M
Debt to Capitalization(1) 32.8%
Dividend Yield (Annualized)(1) 0.7%
3-Year $100 million Share Repurchase Program $84M(3)
Announced 25% increase in quarterly cash dividend in 2016
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Adjusted EBITDA Growing at a Faster Rate than Revenues
Adjusted EBITDA(1) ($Millions)
Five Year CAGR 2011-2016 of 12.9%
$280 $274
$443 $468
$515
$0
$100
$200
$300
$400
$500
$600
2012 2013 2014 2015 2016
(1) Non-GAAP Measure. See the Appendix to this presentation for Definitions of
Non-GAAP Measures and reconciliation of such measures to GAAP.11
SYNNEX Technology
Solutions
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Technology Solutions: $12.5 Billion Business
FOCUSED
MARKETS
DIVISIONS
END MARKETS SERVED
SMB35-40%
Consumers15-20%
Public Sector30-35%
Enterprise20-25%
• Resellers
• VARs
• MSPs
• CSPs
• DMRs
• System
Integrators
Business
Sector
Resellers
CE Retailers
• Food &
Drug
• Military
• Broadcast
• Retailers
• E-Tailers
• Big Box
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Growth is in 3rd Platform Technologies
2nd PLATFORM
3rd PLATFORM
Emerging
Distribution Model
1. Cloud Computing
2. Enterprise Mobility
3. Big Data & Analytics
4. Consumer Technology
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IoT spending will grow from $692.6 billion in 2015 to $1.46 trillion in 2020 with a CAGR of 16.1%. The install
base of IoT endpoints will grow from 12.1 billion in 2015 to more than 30 billion devices in 2020.
Source: IDC – Worldwide Internet of Things Forecast Update 2016-2020, May 2016
Cloud Computing
Everything-as-a-Service
Infrastructure & Business Continuity
Security
Professional Services
PaaS SaaSIaaS
Big Data
Data Warehousing
Professional Services
Business Intelligence
Predictive and Applied Analytics
Data Center Infrastructure
Consumer Technology
Home Automation
Wearables
Home Healthcare
Entertainment
SYNNEX Invests in Growth Technologies
Personal Devices
M2M
Connectivity
Solutions
Security
Device
Management
EnterpriseMobility
Internet of Things Driving Growth
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SYNNEX’ Comprehensive Cloud Strategy
End-to-end Platform, XaaS, Subscription-Based Deployment into SMB
• Marketplace
• Community
• Applications
• Infrastructure
• Electronic Software
Download
Enabling Private and
Hybrid on Premise
Cloud-Based
Architecture
• Ability to Burst to the Public Cloud
• OpenStack Cloud Computing Platform
• IaaS
• Utility Finance
ENTERPRISE HYPERSCALE COMPUTING
Building out the
Hyperscale Datacenter
with Custom Built,
Energy Efficient
Solutions
• Open Compute Project
• High-Performance Computing
• Design & Integration Capabilities
SMALL-TO-MEDIUM BUSINESSES
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Multi-Faceted
Corporate, Commercial,
Consumer, Cloud,
Services Value-Added
Distributor
$12.5B RevenueAdj. Op. Margin: 2.55%
Commercial Desktop,
Peripheral & Component Distributor
$5B Revenue Adj. Op.
Margin: 1.62%
Technology SolutionsGrowth and Diversification through Organic Investments and Acquisition
• Growth in Changing Environment
• Investments in Where Markets are Headed
• Solid Base for Next Step-Up
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Concentrix At-A-Glance
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More than
Transactions
Handled
Yearly
500,000,000
ConcentrixTransformation from Niche ServiceOfferings to Global High Value Innovator
• Consultative Approach
• Extensive Domain Expertise
• Deep Relationships
Revenue$7M
Top Ten BPO CRM Service Provider
$1.6B RevenueAdj. Op. Margin: 8.27%
Annualized revenue for Concentrix is approximately $1.9 billion,
including the acquisition of Minacs on August 1, 2016.
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CRM BPO Large and Growing Market
$61 $64 $67
$70 $73
$77 $172 $178 $188 $197
$208 $219
$0
$50
$100
$150
$200
$250
2015 2016 2017 2018 2019 2020
Non-CRM CRM
Market Summary
• CRM today a $64B market
• Expected to grow just
3.8% this year
• Growth expected to
pick up going forward
(4.6% CAGR)
• Large players
consolidating the market
through recent M&A
• BPO market at $178B
represents adjacent growth
opportunities
• BPO growing at 4.9%
CAGR
Source: IDC Worldwide and U.S. Business Process
Outsourcing Services Forecast, 2016-2020, April 2016.
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IDC Worldwide BPO Market
Billions
Service
Optimization
Revenue
Generation
Customer
Experience
DIGITAL CUSTOMER ENGAGEMENT
CUSTOMER CARE AND TECHNICAL SUPPORT
TECHNOLOGY AND ADVANCED ANALYTICS
CONSULTING AND DESIGN THINKING
FRONT OFFICE BACK OFFICE
CustomerPriorities
EnterprisePriorities
• Brand Awareness
• Profit
• Growth
• Stakeholder Value
• Employee
Satisfaction
• Community
Involvement
CUSTOMER LIFECYCLE MANAGEMENT
LOYALTY PROGRAMS AND PRODUCT RENEWALS
CONNECTED CUSTOMER ENABLEMENT
PROCESS OPTIMIZATION AND AUTOMATION
MARKETING OPTIMIZATION
LEAD GENERATION AND MARKETING EXECUTION
End-to-End Customer Engagement SolutionsHolistic approach across front and back office to improve the customer experience and drive higher value for our clients
• Positive
Experience
• Minimal Level
of Effort
• Meets
Expectations
• Personalized
• Value Received
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Banking andFinancial Services
Payer ( Member )
Support
Provider Service
Policy
Management
Enrollment
Services
Claims Auditing
& Payments
Healthcare & Pharmaceuticals
Consumer Electronics and
Technology
Priority Industry Verticals and Service Offerings
Collections & Debit Management
Risk Management & Compliance
Credit Card Processing
Payment
Services
Customer Acquisition
Life & Health
Policy
Administration
Policy Issuance
Claims
Adjudication
Payment
Processing
Benefit Payments
Technology Platforms
Analytics
Automotive
Consulting/Transformation
Digital Customer Engagement
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Insurance
Digital
Production &
Marketing
Channel
Optimization
Loyalty
Management
Customer
Experience
Management
Acquisition &
Upsell Support
Development &
Use of Telematics
To Provide
Improved
Business
Solutions
Enabling Dealer
Channel Data To
Connect With Auto
Manufacturers,
Dealers &
Customers
Technical &
Customer Support
SYNNEX:Focused on theFuture
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Deeper Penetration of
CNX in Priority High
Margin Verticals
Hyve Solutions
Leverage Scale in
TS and CNX to Drive
More Efficiency
Continued
Optimization of
Core Businesses
Continued Mix Shift
to Higher Margin
Technology Platforms
and Services
Adjacent Market Growth –
Hyve Solutions, BPO
beyond Customer Care
Core Organic Growth
beyond Market Growth
in TS and CNX
Focused Verticals
Emerging
Technologies–
Third Platform/IoT/
Services and CNX
Proprietary Platforms
Continued Growth and Margin Expansion
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Target Revenue Growth Range Target Adjusted Operating Margin
Underlying Financial Goals: Grow EPS Faster than Revenue Growth
ROIC Consistently Higher than WACC
Shareholder Return Superior to our Peers and in Top Tier of Public Companies
0
1
2
3
4
5
6
7
8
9
10
11
12
TechnologySolutions
Concentrix Consolidated
12%
11%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0 0
1
2
3
4
5
6
7
8
9
10
11
12
TechnologySolutions
Concentrix Consolidated
12%
11%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0
+20 to 60 bps
Outlook through FY 2017
26
Investment Highlights
Seasoned Management with In-Depth Industry Experience
Strong Track Record of Revenue Growth, Margin Expansion and Strategic Investments
Superior Total Shareholder Return
Customer-Centric Business Strategy Focused on Growth Markets
Recognized Leadership in Customer Care BPO and Technology Distribution
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Appendix
28
Use of Non-GAAP Financial Measures
29
To supplement the financial results presented in accordance with GAAP, SYNNEX uses Adjusted
operating income, Adjusted operating margin, and Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA"), which are non-GAAP financial measures that exclude
the amortization of intangible assets, restructuring costs, acquisition and integration expenses and
the related tax effects thereon. These non-GAAP measures provide investors with an additional tool
to evaluate operating results. Because these non-GAAP measures are not calculated in accordance
with GAAP, they may not necessarily be comparable to similarly titled measures employed by other
companies. These non-GAAP financial measures should not be considered in isolation or as a
substitute for the comparable GAAP measures, and should be read only in conjunction with the
Company's consolidated financial statements prepared in accordance with GAAP.
SYNNEX management uses the non-GAAP financial measures internally to understand, manage
and evaluate the business, to establish operational goals, and in some cases for measuring
performance for compensation purposes. SYNNEX management believes it is useful for the
company and investors to review, as applicable, both GAAP information, and the non-GAAP
measures in order to assess the performance of SYNNEX’ continuing businesses and for planning
and forecasting in future periods. These non-GAAP measures are intended to provide investors with
an understanding of SYNNEX’ operational results and trends that more readily enable investors to
analyze SYNNEX' base financial and operating performance and to facilitate period-to-period
comparisons and analysis of operational trends. The management of SYNNEX believes the non-
GAAP financial measures are useful to investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and operational decision-making. A
reconciliation of SYNNEX’ non-GAAP financial information to GAAP is set forth in the supplemental
information table at the end of this presentation.
Definition of Non-GAAP Financial Measures
30
Non-GAAP financial measures included in this presentation are:
Adjusted operating income, which is operating income as adjusted to
exclude acquisition and integration expenses, restructuring costs and the
amortization of intangible assets.
Adjusted operating margin, which is Adjusted operating income as defined
above divided by Revenue (at the consolidated level) and Segment
Revenue at the segment level.
Adjusted EBITDA, which is Adjusted operating income as defined above
after excluding depreciation.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in Thousands)
31
Fiscal year ended November 30,
2011 2012 2013 2014 2015 2016
Consolidated
Revenue $10,409,840 $10,285,507 $10,845,164 $13,839,590 $13,338,397 $14,061,837
Operating Income $ 256,228 $ 255,012 $ 240,828 $ 308,507 $ 354,552 $ 379,596
Acquisition and other integration expenses - - 8,394 43,036 10,109 10,393
Restructuring Charges 4,255
Amortization of intangibles 7,584 8,289 7,953 55,161 54,756 55,490
Adjusted operating income $ 263,812 $ 263,301 $ 257,175 $ 406,704 $ 419,417 $ 449,734
Depreciation expense 17,089 16,341 16,509 36,538 48,754 65,261
Adjusted EBITDA $ 280,901 $ 279,642 $ 273,684 $ 443,242 $ 468,171 $ 514,995
Operating margin 2.46% 2.48% 2.22% 2.23% 2.66% 2.70%
Adjusted operating margin 2.53% 2.56% 2.37% 2.94% 3.14% 3.20%
Technology Solutions
Revenue $10,289,877 $10,135,795 $10,666,215 $12,755,514 $11,936,660 $12,490,718
External Revenue $10,289,025 $10,135,120 $10,665,886 $12,755,264 $11,936,282 $12,490,427
Operating income $ 246,610 $ 248,924 $ 237,290 $ 305,499 $ 302,950 $ 315,485
Amortization of intangibles 4,038 3,882 3,912 3,538 2,630 2,657
Adjusted operating income $ 250,648 $ 252,806 $ 241,202 $ 309,037 $ 305,580 $ 318,142
GAAP operating margin 2.40% 2.46% 2.22% 2.40% 2.54% 2.53%
Adjusted operating margin 2.44% 2.49% 2.26% 2.42% 2.56% 2.55%
Concentrix
Revenue $ 127,026 $ 159,522 $ 189,463 $ 1,096,214 $ 1,416,670 $ 1,587,736
External Revenue $ 120,815 $ 150,387 $ 179,278 $ 1,084,326 $ 1,402,115 $ 1,571,410
Operating income $ 9,618 $ 6,376 $ 3,249 $ 2,455 $ 51,127 $ 63,877
Acquisition and other integration expenses - - 8,394 43,036 10,109 10,393
Restructuring Charges 4,255
Amortization of intangibles 3,546 4,407 4,041 51,623 52,126 52,833
Adjusted operating income $ 13,164 $ 10,783 $ 15,684 $ 97,114 $ 113,362 $ 131,358
GAAP operating margin 7.57% 4.00% 1.71% 0.22% 3.61% 4.02%
Adjusted operating margin 10.36% 6.76% 8.28% 8.86% 8.00% 8.27%
Calculation of Financial Metrics(Amounts in Thousands)
32
The following table (in thousands) presents the calculation for working capital velocity, debt to capitalization and dividend yield (Annualized).
as of November 30, 2016
Working Capital Velocity
Revenue (last twelve months) (c) $ 14,061,837
Average working capital
Accounts receivable (5-quarters average) $ 1,633,058
Inventories (5-quarters average)
1,458,184
Accounts payable (5-quarters average)
(1,458,710)
Average working capital (d) $ 1,632,532
Working Capital Velocity (c) / (d) 9X
Debt to Capitalization
Total borrowings, excluding book overdraft (e) $ 963,584
Total equity (f) 1,975,798
Debt to capitalization (e) / ((e) + (f)) 33%
Dividend Yield (Annualized)
Per share dividend declared in the last twelve months (g) $ 0.85
Stock price (h) 116.91
Dividend yield (annualized) (g) / (h) 0.7%