Slide 1: Dell Q2 FY05 Results
Dell Q2 FY05 Results August 12, 2004 www.dell.com
Slide 2: Special Note
Special Note This presentation may contain forward-looking statements, including statements about the outlook and prospects for company and industry growth, as well as statements about the company’s future financial and operating performance. These and other statements that relate to future resu
Slide 3: Agenda
Agenda Introduction • Lynn A. Tyson, VP of IR and Corporate Communications Financial Results • Jim Schneider, SVP & CFO Strategic Direction • Kevin Rollins, CEO Question & Answer Michael Dell, Kevin Rollins & Jim Schneider Close • Kevin Rollins, CEO www.dell.com 3 Investor Relations
Slide 4: Q2 FY05 Highlights
Q2 FY05 Highlights Delivered strong top-line growth and enhanced profitability 14th consecutive quarter of meeting or exceeding our guidance to investors. Double digit revenue growth across all regions and products • Revenue up 20% to $11.7 billion • Revenue outside Americas up almost 30% • Dell
Slide 5: Q2 FY05 Financial Highlights
Q2 FY05 Financial Highlights Delivered $0.31 EPS* and $11.7 billion revenue* Spent nearly $900M to repurchase 25.3 million shares LIQUIDITY GROWTH • Cash flow from • Dell units up 19%; operations > $700 mkt ex-Dell up 13.5% million • 20% Rev growth • $11.8 billion in cash • 29% EPS growth & inve
Slide 6: Q2 FY05 Product Summary
Q2 FY05 Product Summary #1 WW share position with 18.3% of the market Units up 19% Y/Y – 5.5 point growth premium to rest of market Unit Revenue Growth Growth Product Y/Y Q/Q Y/Y Q/Q Desktops 15% -4% 14% -1% Notebooks 28% 7% 18% 6% Enterprise 26% 1% 19% 4% TOTAL 19% -1% 20% 1% Total Revenue incl
Slide 7: Q2 Product Performance: Servers & Storage
Q2 Product Performance: Servers & Storage Servers Q2 units up 31%, a premium of 12 points to the rest of the market Fastest growth of top seven WW #1 in US market share, up +1.2 pts Y/Y to 33.1% Product Introductions • 64-bit PowerEdge 7250 Itanium 2 server PowerEdge 7250 • 8th Generation Po
Slide 8: Q2 Product Performance: Services & Client Systems
Q2 Product Performance: Services & Client Systems Client Systems Growth driven by business systems and consumer mix shift to notebooks Notebooks • Units up 28% Latitude D600 Inspiron 700m • Launched Inspiron 700m Desktops • Units up 15% • Focused on more profitable products in consumer OptiPle
Slide 9: Q2 Product Performance: Software & Peripherals
Q2 Product Performance: Software & Peripherals Software & Peripherals >$170 billion opportunity with no Axim X30 DJ MP3 Player 4100MP Projector global supplier Revenues up 31% WW; Revs up W2300 LCD TV 47% in Europe Printers Printing and Imaging expectations • Expect to sell over 5 million Dell
Slide 10: Q2 FY05 Region Summary
Q2 FY05 Region Summary Revenue Op Inc Unit Revenue Op Inc Growth Growth Growth REGION $M $M Y/Y Q/Q Y/Y Q/Q Y/Y Q/Q Americas 6,404 642 17% 11% 20% 14% 16% 12% Business Unit U.S. 1,567 87 12% -10% -3% -9% 9% -17% Consumer Total 7,971 729 16% 6% 17% 10% 15% 4% Americas EMEA 2,416 172 30% -9% 18% -14%
Slide 11: Q2 Geographic Performance: Americas
Q2 Geographic Performance: Americas Revenue up 16%; Units up 15% • #1 share in U.S. in every customer segment • U.S. market share now 33.3%, up 1.9 points Y/Y In the U.S., SMB revs up 22%; Corporate revs up 19% U.S. Consumer units up 9%; revenue up 12% • Notebook units up 29%; revenue up 19%
Slide 12: Q2 Geographic Expansion: Europe, Middle East & Africa
Q2 Geographic Expansion: Europe, Middle East & Africa Units and Revenue up almost 30% • 12 point premium to market growth Strong growth in all product segments • Enterprise revenue up 40% • Desktop revenue up 27% • Notebook revenue up 18% • S&P revenue up 47% • Services revenue up 72% Total Eu
Slide 13: Q2 Geographic Expansion: Asia-Pacific and Japan
Q2 Geographic Expansion: Asia-Pacific and Japan AP/Japan units up 28% (2X the market) • Revenue up 29%; Op income up 49% • Notebook units up 31%, gained +1.2 points Y/Y and +0.9 points Q/Q In Japan, market share reached a Dell record 12.2 percent, up nearly 2 points Y/Y • Enterprise units up 19%
Slide 14: Q3 FY05 Outlook
Q3 FY05 Outlook Revenue of approximately $12.5 billion; up 7% Q/Q and 18% Y/Y Unit shipments up 9% Q/Q, 21% Y/Y Expect margins to expand, driven by continued cost savings initiatives and an improving cost environment Investment and other income of $50 million Tax rate of 26% $0.33 EPS; u
Slide 15: Profitable Growth
Profitable Growth Ahead of $60 billion target Committed to long-term 9-10% operating income Q2 revenue growth up 20% Y/Y without sacrificing margins Achieve through leveraging our unique model to balance revenue, unit and share growth with profitability www.dell.com 15 Investor Relations
Slide 16: Agility of Dell's Model
Agility of Dell’s Model Dell can quickly adapt to market conditions on a regional, product, and customer level to maximize profits while continuing share growth Identify businesses primed for profitable expansion Use structural advantages to address these opportunities Continuously refine tact
Slide 17: International Strategy
International Strategy Americas Europe Strategy Strategy Drive SMB, education and Drive core enterprise business corporate accounts Results Focus on only the most profitable product Higher Gross Margin % Q/Q categories within Consumer segment Results APJ 17% Op Inc growth Y/Y Strategy Fo
Slide 18: Summary
Summary Model is structurally advantaged • Ability to quickly shift focus to most profitable opportunities • Ability to adapt to changing market dynamics In Q2, we focused on opportunities in: • US SMB and Corporate • European enterprise • Asian enterprise Will continue to actively manage busi
Slide 19: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information www.dell.com