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ANALYST AND INVESTO THE NEW BRACKEN OR DAY | 2 MARCH 2016 W LOGITECH N DARRELL

ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

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Page 1: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

ANALYST AND INVESTOR DAY | 2 MARCH 2016THE NEW LOGITECHBRACKEN DARRELL

ANALYST AND INVESTOR DAY | 2 MARCH 2016THE NEW LOGITECHBRACKEN DARRELL

Page 2: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

This presentation includes forward-looking statements within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: salesgrowth, cost savings, research and development spending, free cash flow, growth potential of product categories, addressableopportunities. These statements are subject to risks and uncertainties that may cause actual results and events to differ matofferings, marketing activities and investment prioritization decisions do not result in the sales, profitability or profitabof our customers and our consumers for our products and our ability to accurately forecast it; if we fail to innovate and devmanner for our new and existing product categories; if we do not successfully execute on our growth opportunities in our neware more limited than we expect; if sales of PC peripherals are less than we expect; the effect of pricing, product, marketin

FORWARD LOOKING STATEMENTS

are more limited than we expect; if sales of PC peripherals are less than we expect; the effect of pricing, product, marketinproducts and marketing strategies fail to separate our products from competitors’ products; if we do not fully realize our goleverage; if there is a deterioration of business and economic conditions in one or more of our sales regions or product cateThese risks and uncertainties are detailed in Logitech’s filings with the Securities and Exchange Commission, including its Qended December 31, 2015 and its Annual Report on Form 10-K for the fiscal year ended March 31, 2015, available atelsewhere. Logitech does not undertake any obligation to update any forward-looking statements to reflect new information or evof this presentation.

Market share information is based on the aggregate sales across certain countries for which we have obtained data, varying byinclude the U.S., Canada, Japan, Denmark and France markets. iPad Keyboards adds Australia and Great Britain. PC and Mobile Speakers also add the Netherlands.Gaming Mice, Pointing Devices and Keyboards also add India, Korea, Thailand, Taiwan, China, Russia, Sweden and Turkey (but noincludes the U.S. Webcams only includes the U.S. and Canada.

To facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measuresTo facilitate comparisons to Logitech’s historical results, Logitech has included non-GAAP adjusted measurescompensation expense, amortization of other intangible assets, restructuring charges (credits), other restructuringtime special charges. Historical GAAP and corresponding non-GAAP measures are provided with our earnings releases and presentatiLogitech’s website. For purposes of this presentation, Logitech provides non-GAAP financial information for its Retail (excludinapproximations for cost and profitability estimates. Logitech also presents percentage sales growth in constant currency (“CCunaffected by fluctuations in currency exchange rates. Percentage sales growth in constant currency is calculated by translatcurrent period’s average exchange rate for that currency and comparing that to current period sales. Logitech believes this iperiod performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliatiprovided on the Investors page of Logitech’s website, together with this presentation. With respect to financial outlook, moshave not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Therefore, no reconcilnon-GAAP outlook.

within the meaning of the U.S. federal securities laws, including, without limitation, statements regarding: salesgrowth, cost savings, research and development spending, free cash flow, growth potential of product categories, addressable markets, growth drivers, and growthopportunities. These statements are subject to risks and uncertainties that may cause actual results and events to differ materially, including without limitation: if our productofferings, marketing activities and investment prioritization decisions do not result in the sales, profitability or profitability growth we expect, or when we expect it; the demandof our customers and our consumers for our products and our ability to accurately forecast it; if we fail to innovate and develop new products in a timely and cost-effectivemanner for our new and existing product categories; if we do not successfully execute on our growth opportunities in our new product categories or our growth opportunitiesare more limited than we expect; if sales of PC peripherals are less than we expect; the effect of pricing, product, marketing and other initiatives by our competitors; if our

FORWARD LOOKING STATEMENTS

are more limited than we expect; if sales of PC peripherals are less than we expect; the effect of pricing, product, marketing and other initiatives by our competitors; if ourproducts and marketing strategies fail to separate our products from competitors’ products; if we do not fully realize our goals to lower our costs and improve our operatingleverage; 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.These risks and uncertainties are detailed in Logitech’s filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the fiscal quarter

K for the fiscal year ended March 31, 2015, available at www.sec.gov, under the caption Risk Factors andlooking statements to reflect new information or events or circumstances occurring after the date

Market share information is based on the aggregate sales across certain countries for which we have obtained data, varying by product category. Most product categoriesKeyboards adds Australia and Great Britain. PC and Mobile Speakers also add the Netherlands.

Gaming Mice, Pointing Devices and Keyboards also add India, Korea, Thailand, Taiwan, China, Russia, Sweden and Turkey (but not the Netherlands). Home Control only

GAAP adjusted measures in this presentation, which exclude primarily share-basedGAAP adjusted measures in this presentation, which exclude primarily share-basedcompensation expense, amortization of other intangible assets, restructuring charges (credits), other restructuring-related charges, investment impairment (recovery), and one-

GAAP measures are provided with our earnings releases and presentations in the Investors section ofGAAP financial information for its Retail (excluding OEM and Lifesize) categories that includes

approximations for cost and profitability estimates. Logitech also presents percentage sales growth in constant currency (“CC”), a non-GAAP measure, to show performanceunaffected by fluctuations in currency exchange rates. Percentage sales growth in constant currency is calculated by translating prior period sales in each local currency at thecurrent 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 currentperiod performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliation between non-GAAP amounts and GAAP amounts isprovided on the Investors page of Logitech’s website, together with this presentation. With respect to financial outlook, most of the excluded amounts pertain to events thathave 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

Page 3: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

WHAT WE’VE DONEWHAT WE’VE DONE

Page 4: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

RETURNED LOGITECH TO GROWTH

We revitalized Logitech’s growth capability

2%

1,840

1,860

1,880

1,900

1,920

1,940

1,960

1,760

1,780

1,800

1,820

1,840

FY13 FY14 FY15

Retail Sales Retail Sales YoY% CC

(6%)

RETURNED LOGITECH TO GROWTH

We revitalized Logitech’s growth capability

4%

3%

5%

7%

9%~7% - 9%

(3%)

(1%)

1%

FY15 FY16

Retail Sales YoY% CCOutlook

Page 5: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

CREATED A DIVERSIFIED AND GROWING PORTFOLIO

3 new categories since 2013

~$450M of sales in FY16*

Mobile Speakers Video Collaboration

Tablet Accessories

2/3 of categories =

*Expected

CREATED A DIVERSIFIED AND GROWING PORTFOLIO

Mice & KeyboardsMice & Keyboards

growing +4% in FY16*

of categories = 80% of salesgrowing in FY16*

Page 6: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

DEMONSTRATED ABILITY TO GROW MARKET SHARE

Gaming Mice #1 +1pt

Achieved Leadership in Almost Every Category

Pointing Devices #1

Home Control #1

Keyboards #1

Gaming Headsets #1

PC Speakers #1

+2pts

+4pts

PC Speakers #1

Mobile Speakers #2

iPad Keyboards #1

Webcams #1Increase in market share YoY

DEMONSTRATED ABILITY TO GROW MARKET SHARE

Achieved Leadership in Almost Every Category

+4pts

+6pts

+7pts

+7pts+7pts

+7pts

+10pts

+16pts

Increase in market share YoY

Page 7: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

An early 2013 investment in LOGI would have generated142% return in three years

DELIVERED EXCEPTIONAL VALUE FOR SHAREHOLDERS

142% return in three years

Nasdaq 100

40%S&P 500

21%21%SMI

~FlatTotal

ShareholderReturn

An early 2013 investment in LOGI would have generated142% return in three years

DELIVERED EXCEPTIONAL VALUE FOR SHAREHOLDERS

142% return in three years

Nasdaq 100

40%LOGI

142%142%

Page 8: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

HOW WE WINHOW WE WIN

Page 9: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

THE FOUNDATION FOR FUTURE GROWTH

• Powerful• Powerful

• Revitalized product creationexisting and new categories

• A winning team

• Outstanding execution• Outstanding execution

THE FOUNDATION FOR FUTURE GROWTH

Powerful designPowerful design

Revitalized product creation …existing and new categories

A winning team … around the world

Outstanding executionOutstanding execution

Page 10: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

EXCEPTIONAL DESIGN CAPABILITY

Design Focus Works as a Strategic Choice

Design Value Index vs. S&P 500

DESIGN CONSCIOUSCOMPANIES:APPLENIKEPROCTER & GAMBLE3MSTARBUCKSINTUITHERMAN-MILLERHERMAN-MILLERDISNEY

EXCEPTIONAL DESIGN CAPABILITY

70+Design Awards in last 3 Years

Page 11: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

NEW CAPABILITIES AND EXPANDED EXPERIENCES

HardwareHardware

Embedded SW

Application

Cloud

Data/Analytics

Insights/Real Time Intelligence

New Benefits & Services

AND EXPANDED EXPERIENCES

Page 12: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

RICHER EXPERIENCES FOR CONNECTED LIVES

UE Boom Logi Circle

RICHER EXPERIENCES FOR CONNECTED LIVES

Logi Circle Harmony

Page 13: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

A TALENTED AND PASSIONATE TEAM

+54%Overall Rating Improvement

+263%+263%Number of Job Applications YoY

A TALENTED AND PASSIONATE TEAM

+54%Overall Rating Improvement

Reduced Layers andIncreased Span of Control

Page 14: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

• Offsetting ~50% currency impact through price increases and cost savings inFY16

OPERATIONAL EXCELLENCE

• Reduced operating expenses by ~5ptsin FY16 while reallocating resources

• Profit growth and improved working capital

generated strong free cash flow of ~$0.5Bover 3 years

• Dramatic cash conversion cycle improvement

currency impact through price increases and cost savings in

5pts over the last 3 years to ~26% of sales

reallocating resources to R&D (+7% YoY) to drive growth

working capital

$0.5B 30

26

23

Improved Cash Conversion Cycle

~20-22

ash conversion cycle improvement

FY13 FY14 FY15 FY16

~20-22

Page 15: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

WHERE WE PLAYWHERE WE PLAY

Page 16: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

5 BIG MARKETS ALL WITH STRONG GROWTH POTENTIAL

Gaming

Music

Productivity &Creativity

5 BIG MARKETS ALL WITH STRONG GROWTH POTENTIAL

VideoCollaboration

Home

Productivity &Creativity

Page 17: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

GAMING GROWING BEHIND RISE OF PC GAMING

GROWTH DRIVERS

eSports

$3.6B

~15% Total PC Gaming Gear CAGR

TOTAL ADDRESSABLE MARKET

~25% Total CAGR

GAMING GROWING BEHIND RISE OF PC GAMINGVIRTUAL/AUGMENTED REALITY COMING SOON

$1.3B

$2B

Cross

15%

VR/AR Gear

CrossPlatform

Gear

$2.0B

$3.6B

25%CAGR

PC GamingGear

2015 2018P

Virtual andAugmented Reality

15%CAGR

PC GamingGear

2015 2018P

Source: NPD, GFK, Tractica, Riot, management estimates

GAMING GROWING BEHIND RISE OF PC GAMING

36M viewers in 2015

up 33% vs. 2014

GROWTH DRIVERS

eSports

GAMING GROWING BEHIND RISE OF PC GAMINGVIRTUAL/AUGMENTED REALITY COMING SOON

Cross Platform

up 33% vs. 2014

Virtual andAugmented Reality

Page 18: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

VIDEO COLLABORATION SPREADING TO EVERY ROOM

More Rooms~40% Total estimated CAGR

GROWTH DRIVERS

TOTAL ADDRESSABLE MARKET($500-1000 Equipment per Room)

# ofRooms4.2M

9.7M

More Users

Better, Simpler,

Source: Wainhouse Research and management estimates

2015 2018P

Better, Simpler,and AffordableSolutions

VIDEO COLLABORATION SPREADING TO EVERY ROOM

More Rooms

GROWTH DRIVERS

More Users

Better, Simpler,Better, Simpler,and AffordableSolutions

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MUSIC PROPELLED BY STREAMING REVOLUTION

Streaming

$9B

GROWTH DRIVERS

TOTAL ADDRESSABLE MARKET

~15% Total CAGR

Multi -

AudioWearables

AudioWearables

New FeaturesExperiences

Paid Streaming MusicSubscribers

$6B

$9B

Sources: NPD, GFK, Nielsen, P. Schoenfeld Asset Management and management estimates

WiFiConnected

MobileMulti -

PurposeSpeakers

2015 2018P

MUSIC PROPELLED BY STREAMING REVOLUTION

Streaming

GROWTH DRIVERS

Features andExperiences

Paid Streaming MusicSubscribers

2015 2018P CAGR

68M 177M 38%

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HOME, THE EARLY STAGES OF TRANSFORMATION

Standards

GROWTH DRIVERS~40% Total CAGR

TOTAL ADDRESSABLE MARKET

Monitoring

Control

$1B

$2.2B

Compelling Use Cases

Which area(s) of the house would you be mostexcited to connect in a smart home system?

2015 2018P

Source: NPD, GFK, IHS Research, Technavio, Icontrol Networks survey, management estimates

Entertainment Room

HOME, THE EARLY STAGES OF TRANSFORMATION

Standards

GROWTH DRIVERS

Compelling Use Cases

Which area(s) of the house would you be mostexcited to connect in a smart home system?

43%

41%

39%

Entertainment Room

Kitchen

Bedroom

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PRODUCTIVITY AND CREATIVITYSTABLE WITH POTENTIAL TO GROW

Evolving Use Cases

GROWTH DRIVERS~Flat Total CAGR

TOTAL ADDRESSABLE MARKET

Input InputContent- Device & OS Agnostic

+37%~$4B ~$4B

Navigation Navigation

2015 2018P

Continued Innovation

Source: NPD, comScore, management estimates

PRODUCTIVITY AND CREATIVITYSTABLE WITH POTENTIAL TO GROW

Evolving Use Cases

Growth in time spent on

GROWTH DRIVERS

ContentDevice & OS Agnostic

Growth in time spent onPC since 2010(U.S. comScore data)

+37%

Continued Innovation

Page 22: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

PC INSTALLED BASE STABLE AND FUELING GROWTHPOTENTIAL FOR MICE AND KEYBOARDS

PC shipments aredeclining…

PC INSTALLED BASE

declining…

But PC installed base isstable at 1.6B

Source: IDC, comScore

2012

PC INSTALLED BASE STABLE AND FUELING GROWTHPOTENTIAL FOR MICE AND KEYBOARDS

ACTUAL DIGITAL MEDIA TIME SPENT (U.S.)PC INSTALLED BASE

PC

Tablet+1,721%

Smartphone

+394%

+37%

DEC 2010 DEC 20142015

Page 23: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati

THE ROAD AHEAD…

Music

Gaming

Music

~$20B TAMby 2018

VideoCollaboration

HomeMusic HomeMusic

~$20B TAMby 2018

Productivity &Creativity

Page 24: ANALYSTAND INVESTOR DAY | 2 MARCH 2016 THE NEW … · period performance, outlook and trends in its business. For historical financials provided in this presentation, reconciliati