21 st Annual Needham Growth Conference January 15, 2019
Forward-Looking Statements Use of Non-GAAP Financial Information Certain statements in this communication may contain “forward - looking statements” This document includes financial results prepared in accordance with generally within the meaning of the Private Securities Litigation Reform Act of 1995. These accepted accounting principles (“GAAP”). In addition to GAAP results, Tech Data statements, including statements regarding Tech Data’s plans, objectives, expectations management believes that the presentation of non-GAAP financial measures is and intentions, Tech Data’s financial results and estimates and/or business prospects, useful to investors because it provides investors with a more complete involve a number of risks and uncertainties and actual results could differ materially from understanding of our operational results and a meaningful comparison of our those projected. These forward looking statements are based on current expectations, performance between periods. The non-GAAP results and outlook should only be estimates, forecasts, and projections about the operating environment, economies and used in conjunction with results reported in accordance with GAAP and are not markets in which Tech Data operates and the beliefs and assumptions of our intended to be a substitute for results reported in accordance with GAAP. Non- management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” GAAP financial measures presented in this presentation or other presentations, “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar press releases and similar documents issued by Tech Data, include but are not expressions are intended to identify such forward looking statements. In addition, any limited to sales, income or expense items as adjusted for the impact of changes in statements that refer to Tech Data’s future financial performance, our anticipated growth foreign currencies (referred to as “constant currency”) , non -GAAP selling, general and trends in our businesses, and other characterizations of future events or and administrative expenses (“SG&A”), non -GAAP operating income, non-GAAP circumstances, are forward looking statements. These forward looking statements are operating margin, non-GAAP net income, non-GAAP earnings per diluted share only predictions and are subject to risks, uncertainties, and assumptions. Therefore, and Adjusted Return on Invested Capital. These non-GAAP financial measures do actual results may differ materially and adversely from those expressed in any forward not have any standardized meaning and are therefore unlikely to be comparable to looking statements. similar measures presented by comparable companies. Management may also use these non-GAAP financial measures to establish operational goals and, in some cases, for measuring performance for compensation purposes. This presentation For additional information with respect to important risks and other factors that could provides a detailed reconciliation between results reported in accordance with cause actual results to differ materially from those in the forward-looking statements, see GAAP and non-GAAP financial measures. Tech Data’s Annual Report on Form 10 -K for the year ended January 31, 2017, including Part I, Item 1A, “Risk Factors” therein, Quarterly Reports on Form 10 -Q, Current Reports on Form 8-K and other securities filings with the Securities and Exchange Commission (the “SEC”) that are available at the SEC’s website at www.sec.gov and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward- looking statements, which speak only as of the date made. Many of these factors are beyond Tech Data’s control. Unless otherwise required by applicable securities laws, Tech Data disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Tech Data undertakes no duty to update any forward looking statements contained herein to reflect actual results or changes in Tech Data’s expectations. 2 2
About Tech Data ▪ One of the world’s largest distributors of technology solutions – FY18 sales: $34 billion; 54% Europe; 43% Americas; 3% Asia-Pacific ▪ An indispensable link in the IT supply chain – An efficient route to market for 1,000+ leading technology vendors – Hundreds of thousands of products sold to 125,000+ value added resellers (VARs), direct marketers, retailers ▪ End-to-end portfolio of IT product and service offerings – From Endpoint, Advanced and Specialized Solutions ▪ Track record of strong financial performance − Solid EPS growth, strong cash flow generation, and ROIC > WACC ▪ Value creation through balanced capital allocation – Organic growth, targeted M&A, and share 3 3 repurchases
Worldwide Financial Highlights Q3 FY’19 ended October 31, 2018 (1) (1) $ 9.3 billion $188 million $3.02 39% 51% 11% Broad-based growth across all regions and solutions portfolios • Operating cash flow: $155 million • Adjusted ROIC: 12% (1) • Debt Repayment: $100 million • Share repurchases: $44 million (1) GAAP to non-GAAP reconciliations available at www.techdata.com/investor 4 4
Worldwide Financial Highlights Q3 FY’19 Year -to-date (1) (1) $ 26.8 billion $447 million $6.87 16% 23% 14% • YTD Operating cash flow: $149 million • Debt Repayment: $200 million • Cash balance: $646 million (1) GAAP to non-GAAP reconciliations available at www.techdata.com/investor 5 5
Indispensable Link in the IT Ecosystem ONE-STOP SHOPPING FOR OUR CUSTOMERS Corporate Corporate Resellers resellers VAR VARs Corporate Resellers Retailers 125,000+ Customers End-Users 1,000+ Vendors CREATING AN EFFICIENT ROUTE TO MARKET FOR OUR VENDORS 6 6
Value Proposition to Vendors Access to Corporate Fragmented Mkt Resellers Corporate resellers Variable-Cost Route to Market World Class VAR Logistics VARs Integrated Supply Chain Corporate Cloud Resellers Retailers Aggregation 1,000+ Vendors 125,000+ Customers AN EFFICIENT ROUTE TO MARKET FOR OUR VENDORS 7 7
Value Proposition for our Customers Product Corporate Availability Resellers Corporate resellers Multi-vendor Solutions Technical VAR Support VARs Financing/ Inventory Mgmt. Corporate Marketing Resellers Retailers Support 1,000+ Vendors 125,000+ Customers ONE-STOP SHOPPING FOR OUR CUSTOMERS 8 8
Balancing Portfolio Attributes ROIC >WACC Advanced Solutions Endpoint Solutions Data Center Ecosystem PC and Mobility Ecosystem Networking, Storage, Servers, Hyper- PCs, Handsets, Tablets, Printers, Product Sets converged, Analytics, Software Supplies, Software Margin Profile Lower Margin Higher Margin Lower Working Capital Velocity Higher Working Capital Velocity Asset Turns 9 9
High-Quality Asset Mix LOWER-RISK PROFILE Accounts Receivable Inventory • Diversified customer base • High velocity inventory turnover • No single customer >10% of sales • Stock rotation and/or price protection provided by many vendors • Credit insurance for majority of non U.S. • Significant portion of sales shipped directly by accounts receivable vendor to end-user Counter-cyclical working capital profile generates cash flow during periods of declining sales 10 10
Focus on Return on Invested Capital ADJUSTED ROIC (1) 18% 16% 14% 13% 14% 12% 12% 11% 12% 10% WACC = ~9% 8% 6% 4% 2% 0% FY15 FY16 FY17 FY18 TTM FY19 (1) Trailing Twelve Month Adjusted ROIC reconciliation available at www.techdata.com/investor 11 11
Disciplined Capital Allocation • Invest in next-gen technology portfolio & skills Organic • Solutions & services offerings investments • Business optimization • Digital transformation • Invest in next-gen technology portfolio & skills Targeted • Optimize global footprint M&A • Strong track record of returning excess capital to Share shareholders Repurchases 12 12
Our Strategy: Moving to Higher Value Hyperconverged/ Geographic Cloud Process Redesign Software-Defined Expansion Analytics & IoT Automation Edge Technologies Global Business Optimization (GBO) Security Advanced Analytics TaaS Services Marketplaces Portfolio Management 13 13
Connecting the World with the Power TM of Technology 14 14
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