Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Q3 2024 Earnings Presentation
24 slides from Unisys Corporation New's earnings presentation, Oct 30, 2024
Slide 1: 2024 Financial Results
ialicen@ler-latsle 2024 Financial Results i unisys Peter Altabef Chair & Chief Executive Officer Deb McCann Chief Financial Officer OCTOBER 29, 2024
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Unisys ca
Slide 3: 3Q24 Highlights
3Q24 Highlights Revenue Reiterating full-year constant currency growth guidance range of (1.5%) to +1.5% 3Q revenue growth of 7.0% YoY or 8.2% in constant currency driven by strong License & Support (L&S) renewals in the ECS segment Ex-L&S revenue growth of (1.3%) YoY or (0.1%) in constant currency
Slide 4: 3Q Revenue ($m)
3Q Revenue ($m) COMPANY DWs CA&l ECS +7.0% YoY +8.2% cc! YoY (1.3%) YoY Down 6.2% in cc’, or Down 1.3% in cc’, or down Up 32.7% in cc', or up (0.1%) cc! YoY down 7.1% as reported 1.5% as reported 29.2% as reported | 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 TotalCompany — Ex-L&S” Total compa
Slide 5: 2024 Revenue Profile
30 2024 Revenue Profile Highly diverse revenue streams with large base of recurring revenue 21% L&S Solutions Mix OF TOTAL COMPANY 719% REVENUE Ex-L&S Solutions Segments Geography Client Sector ECS CA&l DWS All Other US & Canada EMEA Asia Pacific Latin America Financial Services Commercial Public Se
Slide 6: 3Q Gross Margin
3Q Gross Margin COMPANY +870 bps YoY +390 bps YoY 2023 = 2024 2023 = 2024 Total Company EX-L8S) DWSs 150 bps expansion 14.8% 2023 2024 CA&l 100 bps expansion 2023 2024 ECS 980 bps expansion | 2023 2024 Total Company expansion was primarily driven by higher ECS revenue; Ex-L&S expansion due to delive
Slide 7: Profitability and Free Cash Flow ($M, except per share data)
30 Profitability and Free Cash Flow ($M, except per share data) 3Q GAAP & Non-GAAP" Operating 3Q GAAP Net Income (Loss) & 3Q GAAP & Non-GAAP" Diluted Profit & Margins Adj. EBITDA’ and Margins Earnings Per Share 9.9% 15.5% (3.7%) (10.8%) (12.5%) 2023 2024 2023 2024 2023 2024 3Q Operating Cash Flow &
Slide 8: 3Q24 EBITDA and Cash Flow Detail
3024 EBITDA and Cash Flow Detail $M 3024 3023 YTD24 YTD23 EBITDA’ $18.1 $76 ($50.4) ($100.9) ADJUSTED EBITDA' $77.0 $37.0 $2007 $185.5 ADJUSTED EBITDA MARGIN" 15.5% 8.0% 13.7% 12.7% OPERATING CASH FLOW $32.0 ($ 4.1) $58.5 $51.2 CAPITAL EXPENDITURES ($ 17.8) ($ 21.6) ($58.9) ($597) FREE CASH FLOW! $1
Slide 9: Leverage Detail
Leverage Detail $M SEPTEMBER 30, 2024 SENIOR SECURED NOTES! $ 485.0 FINANCE LEASES AND OTHER DEBT 14.9 TOTAL DEBT $499.9 GLOBAL NET PENSION DEFICIT (AS OF DEC 31, 2023) 703.0 TOTAL DEBT INCLUDING PENSION DEFICIT $ 1,202.9 CASH $ 3737 NET LEVERAGE $126.2 NET LEVERAGE INCLUDING PENSION DEFICIT $829.2
Slide 10: Financial Guidance Full-Year 2024
Financial Guidance Full-Year 2024 (1.5%) to 1.5% 6.5% to 8.5% Reiterating Revenue Raising Non-GAAP Growth in Constant Operating Profit Margin Currency from 5.5% to 7.5% Guidance Assumptions & Other 2024 Expectations + Constant currency revenue guidance translates to reported revenue growth of (1.0%)
Slide 11: Our Opportunity
Our Opportunity We have multiple opportunities to create significant value for Unisys stakeholders ec Grow Ex-L&S revenue Building awareness and recognition of our solutions & capabilities @ Accelerate growth rate Through Al-related services and industry solutions, such as Unisys Logistics Optimizat
Slide 12: The Unisys Transformation: 2025 & Beyond
The Unisys Transformation Expansion of Alliance Partner Program 2021 © operational New Brand & Go-To- 2020 Re-Organization Market Investment Sale of Unisys Federal Key Acquisitions Transform Business Solution Portfolio Pension Funding & Debt Recapitalization U Accelerating Growth Improving Pre-Pensi
Slide 13: A comprehensive, start-to-future AI portfolio with a pragmatic approach
A comprehensive, start-to-future AI portfolio with a pragmatic approach
Slide 14: Appendix
Appendix Us unisys
Slide 15: Potential Economic Benefit of Tax Assets
Potential Economic Benefit of Tax Assets NET DEFERRED TAX FUTURE AVAILABLE $M DESCRIPTION 4 REDUCTIONS IN TAXABLE ASSETS INCOME U.S. NOLS AND TAX CREDITS: NET OPERATING LOSS - FEDERAL & STATE $546 $1,743 TAX CREDITS 2 533 PENSION AND OTHER: PENSION 127 519 OTHER DEFERRED TAX ASSETS 99 405 TOTAL AVAI
Slide 16: Excluding License and Support (Ex-L&S)
Excluding License and Support (Ex-L&S) $M 3Q24 3Q23 YTD24 YTD23 REVENUE $ 4970 $ 464.6 $1463.0 $1,4578 L&S REVENUE 104.5 671 279.8 284.8 EX-L&S NON-GAAP REVENUE $392.5 $ 397.5 $1,183.2 $ 1,173.0 GROSS PROFIT $145.0 $95.3 $ 410.9 $370.1 L&S GROSS PROFIT TAT 39.6 195.2 198.5 EX-L&S NON-GAAP GROSS PROF
Slide 17: Non-GAAP Operating Profit
Non-GAAP Operating Profit $M 3Q24 3Q23 YTD24.- YTD23 GAAP OPERATING PROFIT (LOSS) $75 ($ 171) $488 $329 GOODWILL IMPAIRMENT 391 - 391 - CERTAIN LEGAL MATTERS' (2.2) 93 8.2 237 COST REDUCTION AND OTHER EXPENSES2 46 78 15.9 19.1 PENSION AND POSTRETIREMENT EXPENSE! 04 04 11 11 NON-GAAP OPERATING PROFIT
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 3024 3023 YTD24 YTD23 NET (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION ($ 61.9) ($ 50.0) ($ 223.4) ($ 265.4) NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS - 11 (0.3) 2.5 UTEREST EXPENSE: NET OF INTEREST INCOME OF $5.5, $6.9, $17.3 AND 24 0.9 64 29 PROVISION F
Slide 19: Non-GAAP Net Income
Non-GAAP Net Income $M EXCEPT SHARE AND PER SHARE DATA 3Q24 3Q23 YTD24 YTD23 NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION ($61.9) ($50.0) ($ 223.4) ($ 265.4) PENSION & POSTRETIREMENT EXPENSE PRETAX 124 10.3 m4 214.1 TAX 0.2 (0.2) 0.4 (0.6) NET OF TAX $11.9 $10.5 $170.7 $214.7 GOODWILL IMPAIRMENT PRET
Slide 20: Non-GAAP Diluted Earnings Per Share
Non-GAAP Diluted Earnings Per Share $M EXCEPT SHARE AND PER SHARE DATA 3Q24 3Q23 YTD24 YTD23 NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION ($ 5.8) ($ 22.3) $79 $6.3 WEIGHTED AVERAGE SHARES (THOUSANDS) 69,357 68,381 69,112 68,205 PLUS INCREMENTAL FROM ASSUMED VESTING OF EMPLOYEE STOCK
Slide 21: Adjusted Free Cash Flow
Adjusted Free Cash Flow $M 3Q24 3Q23 YTD24 —- YTD23 CASH PROVIDED BY OPERATIONS $32.0 ($ 4.1) $58.5 $ 51.2 ADDITIONS TO MARKETABLE SOFTWARE (11.0) (11.6) (36.7) (32.9) ADDITIONS TO PROPERTIES (37) (3.5) (11.0) (15.4) ADDITIONS TO OUTSOURCING ASSETS (3.1) (6.5) (11.2) (11.4) FREE CASH FLOW $14.2 ($ 2
Slide 22: Non-GAAP Net Income Margin
Non-GAAP Net Income Margin $M 3Q24 3Q23 YTD24.—- YTD23 REVENUE $4970 $4646 $1463.0 $1,4578 NET (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION ($ 61.9) ($ 50.0) ($223.4) ($265.4) NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 5.8) ($ 22.3) $79 $63 NET (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION AS A %
Slide 23: Definitions of Non-GAAP Financial Metrics
Definitions of Non-GAAP Financial Metrics Non-GAAP operating profit - This measure excludes pretax pension and postretirement expense, pretax goodwill impairment charge and pretax charges in connection with certain legal matters related to professional services and legal fees, including legal defens
Slide 24: Definitions of Other Metrics and Terms
Definitions of Other Metrics and Terms Constant currency - A significant amount of the company’s revenue is derived from international operations. As a result, the company’s revenue has been and will continue to be affected by changes in the U.S. dollar against major international currencies. The co
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