Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q1 2005 Earnings Presentation
24 slides from Unisys Corporation New's earnings presentation, Apr 14, 2005
Slide 1: 1Q05 Financial Release
1Q05 Financial Release April 14, 2005 Joe McGrath Janet Haugen Jack McHale President & CEO CFO Investor Relations Officer
Slide 2: Disclaimer
Disclaimer Statements made by Unisys during today’s presentation that are not historical facts, including those regarding future performance, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions
Slide 3: First-Quarter 2005 Overview
First-Quarter 2005 Overview Joe McGrath President & CEO
Slide 4: 1Q05 Overview
Slide 1 1Q05 Overview 1Q05 was a challenging quarter for Unisys • Loss of 13 cents per share on GAAP basis • Loss of 4 cents per share excluding pension expense Beginning to see results of our efforts to drive profitable growth • Good services order growth, driven by outsourcing • Progress in strate
Slide 5: Financial Review
Financial Review Janet Haugen Chief Financial Officer
Slide 6: 1Q05 Order Performance
Slide 2 1Q05 Order Performance Overall orders were flat in the quarter Good growth in services orders Services order growth driven by outsourcing Technology orders down double digits
Slide 7: 1Q05 Financial Results
Slide 3 1Q05 Financial Results 1Q05 1Q04 Revenue $1,367M $1,463M Operating Margin – As Reported (4.8%) 4.0% Net Income (Loss) – As Reported ($46M) $29M Earnings (Loss) Per Share – As Reported (13 cents) 9 cents Operating Margin – (1.4%) 5.5% Excluding Pension Expense Net Income (Loss) – ($14M) $44M
Slide 8: 1Q05 Revenue by Geography
Slide 4 1Q05 Revenue by Geography Revenue: $1,367 Million 1Q05 % Americas Customer Change 7% Revenue vs. 1Q04 Pacific Asia United States $621M -9% 16% United States International $746M -4% 45% Europe/ Africa Total $1,367M -7% 32%
Slide 9: 1Q05 Revenue by Business Segment
Slide 5 1Q05 Revenue by Business Segment Revenue: $1,367 Million 1Q05 % Change Customer vs. Services Revenue 1Q04 81% Services $1,108M -5% Technology $259M -13% Overall $1,367M -7% Technology 19%
Slide 10: 1Q05 Services Revenue Breakdown
Slide 6 1Q05 Services Revenue Breakdown Customer Revenue: $1,108 Million 1Q05 Core Customer % Change Maint. vs. 1Q04 Revenue 12% Consulting/ Consulting/SI $370M -2% Infrastr. Systems Int. Services 33% Outsourcing $421M -5% 17% Infrastructure $186M -7% Services Core $131M -10% Outsourcing Maintenance
Slide 11: 1Q05 Technology Revenue Breakdown
Slide 7 1Q05 Technology Revenue Breakdown Customer Revenue: $259 Million 1Q05 % Change Customer vs. Revenue 1Q04 Specialized Enterprise Technology $198M -2% Servers 24% Enterprise Specialized $61M -36% Technology Servers 76% Overall $259M -13%
Slide 12: 1Q05 Overall Operating Margins
Slide 8 1Q05 Overall Operating Margins Reported (GAAP) Excluding Pension Expense 6% 6% 5.5% 4% 4% 4.0% 2% 2% 0% 0% -1.4% -2% -2% -4% -4.8% -4% -6% -6% 1Q04 1Q05 1Q04 1Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at www.unisys.com/i
Slide 13: 1Q05 Services Operating Margins
Slide 9 1Q05 Services Operating Margins Reported (GAAP) Excluding Pension Expense 6% 6% 4% 4% 4.1% 2% 2% 2.5% 0% 0% -2% -2% -3.2% -4% -4% -6% -6.8% -6% -8% -8% 1Q04 1Q05 1Q04 1Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at www.uni
Slide 14: 1Q05 Technology Operating Margins
Slide 10 1Q05 Technology Operating Margins Reported (GAAP) Excluding Pension Expense 12% 12% 9% 9% 9.5% 8.6% 8.5% 6% 6% 6.1% 3% 3% 0% 0% 1Q04 1Q05 1Q04 1Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at www.unisys.com/investor
Slide 15: 1Q05 Cash Flow
Slide 11 1Q05 Cash Flow 1Q05 1Q04 Cash Flow From Operations $27M $129M Capital Expenditures $97M $113M % Revenue-Generating Cap Ex 78% 68% Free Cash Flow (Usage) ($71M) $16M Depreciation & Amortization $93M $92M
Slide 16: Financial Outlook
Slide 12 Financial Outlook Second-quarter 2005 • EPS excluding pension expense about breakeven: +2 to -2 cents • Flat revenue growth from prior-year levels Full-year 2005: • EPS excluding pension expense in the 50 - 60 cents range … given challenging first half, more likely at lower end of range • L
Slide 17: Strategic Update
Strategic Update Joe McGrath President & CEO
Slide 18: 2005 Strategic Initiatives
Slide 13 2005 Strategic Initiatives Drive top-line order and revenue growth … particularly in outsourcing, enterprise servers Execute cost reduction programs Drive profitable growth in outsourcing business … improve execution and delivery Progress in All Three Areas in 1Q05
Slide 19: Initiatives to Drive Order/Revenue Growth
Slide 14 Initiatives to Drive Order/Revenue Growth Expand share of top clients’ IT spending – “Blueprint Accounts” program Continue to leverage Unisys 3D Visible Enterprise Pursue growth opportunities in security Implement aggressive sales/marketing programs to drive outsourcing growth Drive program
Slide 20: Starting to See Results in Order Growth
Slide 15 Starting to See Results in Order Growth Closed $400M+ of multi-year contracts in 1Q05 Key contracts with: • New York City Transit • Resolution Life Group in the United Kingdom • A major U.S. financial services institution • A large U.S. city public entity In early April, closed new win with
Slide 21: Cost Reduction Initiative – Actions
Slide 16 Cost Reduction Initiative – Actions Continued 3Q04 cost reduction actions • Expect to be essentially complete by end of June • Cost benefits in 2H05 Continued to expand global sourcing program • Formally opened center in Bangalore, India • Expect 4,500 India-based resources by 2008 Roll out
Slide 22: Outsourcing Initiative – Actions
Slide 17 Outsourcing Initiative – Actions Continued to make progress in addressing issues in a few transformational BPO outsourcing operations • Hired new senior management • Streamlining business processes • Renegotiating with clients • Expect continued negative impact throughout 2005 … gradual imp
Slide 23: Summary
Slide 18 Summary Made progress in 1Q against strategic initiatives for 2005 Showed good services order growth Progress in reducing costs … expanding use of lower-cost offshore resources Launched initial Six Sigma Lean programs Look to build on progress in 2Q … positioned for stronger 2H of 2005
Slide 24: Questions & Answers
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