Logitech International Stock

Logitech International S.A. (Logitech) designs, manufactures and sells products that help businesses thrive and bring people together when working, creating, gaming and streaming. The company sells these products through a number of brands: Logitech, Logitech G (including ASTRO Gaming, Streamlabs, and Blue Microphones) and Ultimate Ears.

The company’s diverse portfolio includes:

Creativity & Productivity: personal computer (PC) mice and presentation tools (reported as Pointing Devices), PC keyboards and keyboard/mouse combination products (reported as Keyboards & Combos), PC-based webcams including streaming cameras (reported as PC Webcams), and tablet keyboards and styluses (reported as Tablet & Other Accessories);

Gaming: gaming mice, keyboards, headsets, steering wheels and other control devices, and Streamlabs services;

Video Collaboration: conference cameras for meeting rooms, webcams and headsets;

Music-related products include wireless speakers (reported as Mobile Speakers), and PC speakers, headsets, microphones and earphones (reported as Audio & Wearables).

These products are all classified under a single operating segment: Peripherals. They also are compatible with many cloud or cloud-based services: video conferencing platforms (e.g. Zoom, Microsoft Teams, Google Meet); esports or video games (e.g. League of Legends, Call of Duty, Valorant); music streaming platforms (e.g. Spotify, Apple Music); content streaming platforms (e.g. Twitch, YouTube); and creativity and productivity platforms (e.g. Google Workplace, Adobe Creative Cloud).

The company sells its products to a broad network of international customers, in the Americas, Europe, the Middle East, and Africa (EMEA) and the Asia Pacific. This includes direct sales to retailers, e-tailers, and end consumers through the company’s e-commerce platform, and indirect sales to end customers through distributors.

The company continually reviews its product offerings and its strategic direction in light of its profitability targets, competitive conditions, changing consumer trends and the evolving nature of the interface between the consumer and the digital world.

Business Strategy

Logitech has an extensive global go-to-market network that is leveraged to introduce new products, enter new market categories and optimize the value of the company’s existing products and product categories. The company has multiple opportunities to drive growth through existing products in existing and new retailers and e-tailers as well as through new products in existing and new retailers and e-tailers. Across Logitech’s multiple categories, the company focuses on enhancing its marketing capabilities around brand strategy and execution, digital marketing, and marketing technology. The company continues to increase its presence when and where its products and messages are most relevant, which enables it to drive brand value. The company’s supply chain’s extensive global reach, key distribution channels, adoption of factory automation and strategic business relationships combined with extensive analytic modeling expertise, optimization tools and global processes provide a competitive advantage against many of its competitors.

Products

Logitech designs, manufactures and markets products that help businesses thrive and bring people together when working, creating, gaming and streaming, for use by consumers and enterprise customers.

Creativity and Productivity

Pointing Devices: Logitech offers a variety of pointing devices. Some of the company’s key products in this category include:

The Logitech MX Master 3 and MX Anywhere 3 wireless mice, the company’s flagship wireless mouse products. Enabled with Logitech Flow cross-computer control software and Logi Bolt cross-operating system connectivity, these products represent the new paradigm for precise, fast, comfortable cross-computer digital navigation and digital creativity.

The Logitech Wireless Mouse M650, which offers a new precise scrolling wheel, an 18-month battery life, Logi Bolt connectivity compatible with any operating system, side-buttons and comfortable design, and is available in Large, Medium and left-handed versions with sustainable materials.

The Logitech Wireless Mouse M185, a wireless mouse with nano receiver technology that is compatible with any computer.

The Logitech Pebble Mouse, a wireless mobility mouse with dual connectivity (BT and unifying nano technology) that is compatible with any computer.

Two recently introduced mice, Logitech Lift vertical mouse with Logi Bolt wireless technology and the new smart wheel available in right and left-handed version, and Pop Mouse for younger generations that offers more style at the desk.

Keyboards and Combos: Logitech offers a variety of corded and cordless keyboards, living room keyboards, and combos (keyboard-and-mouse combinations). Some of the company’s key products in this category include:

The Logitech Wireless Combo MK270, a full-size keyboard and mouse combination with a tiny USB receiver.

The Logitech MX Keys Wireless keyboard, a premium backlit keyboard with customizable keys to directly access menus and shortcuts within leading creativity and productivity apps. The company added the MX Keys mini wireless keyboard ideal for smaller spaces and creators and Logitech MX mechanical wireless keyboard.

The Logitech K380 wireless minimalist keyboard with multi-switch functionality to easily navigate from one screen to another (from PC to Phone to tablets) that is compatible with any computer.

PC Webcams: The company’s PC Webcams category comprises webcams targeted primarily at video conferencing users purchasing for individual use. A key market driver includes people upgrading their work-from-home video conferencing setup. The Logitech HD Pro Webcam C920 and C922 are key products in this category and the company added Logitech Brio 300 and Brio 500 to the portfolio.

Tablet and Other Accessories: The company’s Tablet and Other Accessories category includes keyboards for tablets and smartphones, as well as other accessories for mobile devices. These products are mostly for iPads but are also for select Samsung and other Android tablets. Some of the company’s key products in this category include:

The Combo Touch for the iPad 9th Generation, iPad Air, iPad Pro 11 and iPad Pro 12.9, is the company’s newest design offering a Smart Connected backlit full-size keyboard, any-angle kickstand for flexible viewing angles and a trackpad for gestures, clicks and navigation.

The Rugged Folio Keyboard for the iPad 9th Generation, bringing a more protective rugged folio, with a wipeable fabric keyboard, a rugged and protective holder and an any-angle kickstand to allow multiple viewing angles. The Rugged Folio uses Smart Connector technology to connect to the iPad seamlessly, with no need for batteries or Bluetooth pairing.

The Logitech Slim Folio Keyboard for the iPad Pro 11 and 12.9, bringing a Bluetooth backlit keyboard with a folio design for optimal working and viewing angle, light front and back protection and an Apple Pencil holder. The Logitech Slim Folio Keyboard for the 9th generation iPad for a light protection folio with a Bluetooth keyboard.

The Rugged Combo Keyboard and Rugged Combo Touch, Made for Education are designed to provide the best keyboard and touchpad experience for the iPad Entry 9th generation in classrooms or at home, featuring drop protection, secure sealed keyboard and any angle viewing.

Gaming

Logitech G provides products for both gamers and creators, including mice, keyboards, headsets, and steering wheels, in addition to streaming software through Streamlabs. Incorporating innovative design and advanced technologies, some of the key products and solutions in this category include:

The Logitech G PRO X Superlight Wireless Gaming Mouse that was designed in collaboration with the world's top esports professionals, featuring the company’s LIGHTSPEED professional grade wireless technology, and weighing in at less than 63 grams.

The Logitech Pro Racing Wheel that features the company’s exclusive TRUEFORCE feedback system that connects directly to in-game physics, and its new Direct Drive motor.

The ASTRO A30 Wireless Headset that is compatible with PC, Xbox Series X|S, PlayStation5, Nintendo Switch, and mobile, portable gaming devices.

Streamlabs software which provides streaming and monetization tools for content creators to manage their audience and broadcast.

Video Collaboration

The Video Collaboration category includes Logitech’s conference room cameras, which combine enterprise-quality audio and high definition (HD) 4K video with affordability to bring video conferencing to businesses of any size, as well as state of the art webcams and headsets that turn any desktop into an instant collaboration space. The company’s key products in this category include:

Logitech Rally Bar, an all-in-one video bar purpose-built for midsize rooms, featuring brilliant video, room-filling audio, and the flexibility to deploy in PC or appliance mode.

Logitech Rally which offers best-in-class video conferencing with Ultra HD 4K video and professional audio that easily turns medium- to large-sized conference rooms into video-enabled collaboration rooms.

Logitech MeetUp which is Logitech’s premier ConferenceCam designed for huddle rooms, with a room-capturing 120° field of view ("FOV"), 4K optics and exceptional audio performance.

Logitech Tap touch-screen controller which connects to any computer through USB and serves as an ideal controller for video conferencing room solutions from Google, Microsoft, and Zoom.

Logitech BRIO which has 4K video, RightLight 3 and high dynamic range (HDR) to improve challenging lighting, and Windows Hello facial recognition support for secure login using just a user's face.

Music

Mobile Speakers: The company’s Mobile Speakers category is a portfolio of portable wireless Bluetooth speakers for music on the go. The top revenue-generating product in the company’s Mobile Speakers category during fiscal year 2023 was Ultimate Ears BOOM 3 (BOOM3), its ruggedized portable Bluetooth wireless speaker. During fiscal year 2023, the company’s collection of portable Bluetooth speakers included WONDERBOOM3, BOOM3, MEGABOOM3, and its largest most powerful speaker HYPERBOOM that delivers the loudest and most rich audio performance in the portfolio.

Audio and Wearables: The company’s Audio and Wearables category comprises PC speakers, PC headsets, in-ear headphones, premium wireless audio wearables designed to enhance the audio experience, and studio-quality Blue Microphones for professionals and consumers, such as Yeti, Yeti Nano and Yeti X.

Research and Development

The company’s research and development expenses for fiscal years 2023, were $280.8 million.

Sales and Distribution

Principal Markets

Revenues from sales to customers in Switzerland, the company’s country of domicile, represented 3% of its sales for each of fiscal year 2023. In fiscal years 2023, revenues from sales to customers in the United States represented 35% of the company’s sales. In fiscal year 2023, revenues from sales to customers in Germany represented 14% of its sales. Revenues from sales to customers in China represented 11% of its sales for fiscal year 2023.

Sales and Distribution

The company’s sales and marketing activities are organized into three geographic regions: the Americas (North and South America), EMEA (Europe, Middle East, Africa) and Asia Pacific (China, Japan, Australia, Taiwan, India and other countries).

The company sells its products primarily to a network of distributors, retailers and e-tailers. The company supports these channels with its direct sales force and third-party distribution centers located in North America, South America, Europe and the Asia Pacific.

The company’s distributor customers typically resell products to retailers, value-added resellers, systems integrators and other distributors with whom Logitech does not have a direct relationship.

Logitech's products can be purchased in a number of major retail chains, where the company typically has access to significant shelf space. In addition, Logitech products can be purchased online either directly or indirectly from Logitech.com or through e-tailers, the websites of its major retail chains, and others. Logitech products are also carried by business-to-business direct market resellers.

In fiscal year 2023, Amazon Inc. and its affiliated entities together accounted for 19% of the company’s gross sales. In fiscal year 2023, Ingram Micro Inc. and its affiliated entities together accounted for 13% of the company’s gross sales. TD Synnex and its affiliate entities together accounted for 15% of the company’s gross sales for fiscal year 2023.

Customer Service and Technical Support

The company’s customer service organization provides user technical support, support related to product inquiry, and order support. The company supports these customer service functions with outsourced operations, as well as inhouse support teams located in countries across the world. Outsourced locations include the Philippines, the United Kingdom, Japan, Bulgaria and China, and inhouse support is primarily located in the United States and India with several other locations in each region. The company’s customer service and technical personnel in each of its regions provide support services to retail purchasers of products through telephone, e-mail, forums, chat, and the Logitech Support website. For some of its brands, dedicated support websites and dedicated internal support teams are available. To improve its customers' experience and operate efficiently, the company uses technology to facilitate chatbot interactions, enable self-help and apply Artificial Intelligence to optimize support searches. The company also has multiple walk-in centers in Korea and China, managed by third-party providers, where consumers may obtain service for their Logitech products.

Logitech provides warranties on the company’s branded products that range from one to five years. For its Video Collaboration category, the company also works with channel partners to offer bundled support services with Logitech Video Collaboration solutions.

Competition

Creativity and Productivity

Pointing Devices: Apple Inc. (Apple), Microsoft Corporation (Microsoft), Lenovo Group Ltd (Lenovo), Dell Technologies Inc. (Dell), and HP Inc. are the company’s main competitors worldwide. The company also experiences competition and pricing pressure from less-established brands, including house brands and local competitors in Asian markets, such as Elecom Co., Ltd., Buffalo Inc., Shenzhen Rapoo Technology Co., Ltd. (Shenzhen Rapoo), and Xiaomi Corporation.

Keyboards & Combos: Microsoft and Apple are the main competitors in the company’s PC keyboard and combo product lines. The company also experiences competition and pricing pressure for corded and cordless keyboards and combos from less-established brands, including house brands and local competitors in Asian markets, such as Shenzhen Rapoo, IKBC, and Xiaomi Corporation.

PC Webcams: The company’s primary competitors for PC webcams are Microsoft, Cisco and other manufacturers taking smaller market share, such as Razer Inc (Razer) and HIKVision.

Tablet and Other Accessories: Competitors in the tablet keyboard market are Apple, Zagg Inc., Kensington Computer Products Group, Belkin International, Inc., Targus Corporation and other less-established brands. Competitors in the tablet case market include Apple, Otter Products LLC, Speck Products and a large number of smaller brands.

Gaming

Competitors for the company’s gaming products include Razer, Corsair Gaming, Inc., SteelSeries (owned by GN), Turtle Beach Corporation and HyperX (owned by HP Inc.), among others.

Video Collaboration

The company’s competitors for Video Collaboration products include Cisco Systems, Inc., Poly (owned by HP Inc.), Jabra (owned by GN), AVer Information Inc., Neat and Yealink (Xiamen) Network Technology Co.Ltd, among others.

Music

Mobile Speakers: The company’s competitors for Bluetooth wireless speakers include Bose Corporation (Bose), Harman International Industries, Inc (owned by Samsung Electronics Co., Ltd., Harman owns JBL and has Harman Kardon as a division), and Beats Electronics LLC (Beats) (owned by Apple), among others. Harman is the company’s largest competitor. Personal voice assistants and other devices that offer music, such as Sonos, Amazon's Echo, Google Home (owned by Alphabet, Inc.) and Apple HomePod, also compete with the company’s products. Amazon is also a significant customer of the company’s products.

Audio & Wearables: For PC speakers, the company’s competitors include Bose, Cyber Acoustics LLC, and Creative Labs, Inc., among others.

For PC headsets, the company’s main competitors include Poly (owned by HP Inc.) and Jabra (owned by GN), among others. In-ear headphones competitors include Beats, Bose, Apple, Sony Corporation (Sony), JBL and Sennheiser, among others.

The company’s competitors for Blue Microphones products include Rode Microphones LLC, Audio Technica Corporation, Samson Technologies Corp., Shure Incorporated, Razer and Apogee Electronics Corp., among others.

Seasonality

The company’s product sales are typically seasonal. Sales are generally highest during its third fiscal quarter (October to December) primarily due to the increased consumer demand for its products during the year-end holiday buying season and year-end spending by enterprises. Cash flow is correspondingly lower in the first half of the company’s fiscal year (year ended March 31, 2023) as it typically builds inventories in advance for the third quarter and it pays an annual dividend following its Annual General Meeting, which is typically in September.

Research and Development

The company’s research and development expenses for fiscal year 2023, included $280.8 million.

Environmental Regulation

In Europe, Logitech products are regulated by a number of end-of-life stewardship directives, including the Waste Electrical and Electronic Equipment (WEEE) Directive, the Packaging Directive and the Battery Directive, which require producers of electrical goods, packaging, and batteries to finance the collection, recycling, treatment and disposal of relevant products.

Sourcing of certain metals is regulated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, specifically Section 1502, which addresses the use of Conflict Minerals in the supply chain. Similar legislation is emerging in other countries worldwide. The company has established systems which facilitate its compliance with the sourcing, traceability and reporting obligations and the reporting requirements of this Act aligned with guidelines published by the Securities and Exchange Commission. As a member of the Responsible Business Alliance (RBA) and the Responsible Minerals Initiative (RMI), the company participates in the industry-wide Conflict-Free Sourcing Initiative and its Responsible Minerals Assessment Program (RMAP).

The company’s commitment to combat slavery and human trafficking is underpinned by the Transparency in Supply Chain Act of 2010 (S.B. 657), the United Kingdom Modern Slavery Act of 2015, the California Transparency in Supply Chains Act of 2010, the Australian Modern Slavery Act of 2018 and existing or emerging similar legislation worldwide. The company utilizes its formalized commitment to the United Nations Global Compact (UNGC) adherence to the RBA code of conduct and transparently report its programs to identify and eradicate slavery and human trafficking in its global supply chains.

History

Logitech International S.A. was founded in Switzerland in 1981. The company was incorporated in 1981.