Dell Technologies Inc. · NYSE:DELL
Dell Technologies — Investor Day (October 2023)
58 slides from Dell Technologies's investor day presentation, Oct 5, 2023
Slide 1: Dell Technologies Securities Analyst Meeting
Dell Technologies Securities Analyst Meeting Exhibit 99.1
Slide 2: Disclosures and Agenda
Rob Williams Senior Vice President, Investor Relations Disclosures and Agenda
Slide 3: Disclosures
Disclosures NON-GAAP FINANCIAL MEASURES This presentation includes information about non-GAAP revenue, net revenue excluding VMware adjusted for estimated reseller revenue, non-GAAP FY19 pro forma revenue, non-GAAP net income, non-GAAP net income attributable to Dell Technologies Inc. - basic, non-G
Slide 4: Agenda
Dell Technologies Securities Analyst Meeting Agenda Strategy & Trends Infrastructure Solutions Group Strategy Client Solutions Group Strategy Company Vision Value Creation Framework Q&A Michael Dell Jeff Clarke Sam Burd Yvonne McGill Dell Executive Team Arthur Lewis
Slide 5: Company Vision
Company Vision Michael Dell Chairman and Chief Executive Officer
Slide 6: Key messages
Key messages We are growing revenue, cash flow and earnings backed by operational excellence Our strategy, operational advantages and track record of execution have us well positioned We are committed to driving long-term value with growing capital return Data and technology are central to everythin
Slide 7: Technology is central to everything we do, and Dell is thriving
Technology is central to everything we do, and Dell is thriving Almost four decades of growth and execution 1) Revenue presented as of the most recently filed, publicly available information. Please refer to relevant filings for basis of presentation. $B Dell revenue1 Managing through the eras Stron
Slide 8: Strong cash flow generation with demonstrated capital returns
Strong cash flow generation with demonstrated capital returns Profitable growth with strong cash flow over time and a commitment to capital returns We have delivered nearly $0.5T of revenue, $36B of adj. FCF2 and $30 non-GAAP diluted EPS2 over the last five years Since we last met two years ago, we’
Slide 9: Shareholder commitment
Shareholder commitment We are committed to driving long-term value creation VMware spin-off ü Boomi and RSA divestitures ü De-levered to investment grade ü Instituted long-term value creation framework ü Programmatic & opportunistic share repurchase ü Raised annual dividend ü Ellen Kullman elected b
Slide 10: Simple and powerful strategy aligned with customer priorities
Looking to the future Simple and powerful strategy aligned with customer priorities Customer Priorities Leveraging our strengths to extend our leadership and capture new growth Artificial Intelligence Edge Multicloud Security Workforce Experience
Slide 11: Strategy & Trends
Strategy & Trends Jeff Clarke Vice Chairman and Chief Operating Officer
Slide 12: Key messages
Key messages GenAI is an inflection point that drives growth across the technology landscape Workloads and usage patterns are trending in our favor Dell Technologies Strategy: leverage our strengths to extend our leadership and capture new growth Data and technology are central to everything
Slide 13: Our digital world is generating exponential data growth
Our digital world is generating exponential data growth Technology comprises a growing share of GDP Data is continuing to grow 1) IDC, Worldwide IDC Global DataSphere Forecast, 2023-2027: It's a Distributed, Diverse, and Dynamic (3D) DataSphere, April 2023 2) IHS Markit Macroeconomic Report, IDC Bla
Slide 14: GenAI is an inflection point
64% of business leaders believe GenAI provides a competitive edge1 1) KPMG, Generative AI: From Buzz to Business Value, May 2023. 2) Revenue presented as of the most recently filed, publicly available information. Please refer to relevant filings for basis of presentation. $B Dell revenue2 AI will s
Slide 15: AI TAM projected to grow at an 18% CAGR
AI TAM projected to grow at an 18% CAGR over the next four years to $120B+ Growing AI TAM across hardware and services AI Hardware and Services TAM1 Hardware Services 2023 2025 2027 GenAI growth opportunity for Dell $4.4T Potential addition to global GDP due to increased productivity2 20% Increase i
Slide 16: Data era trends in our favor
US workers are expected to work in a hybrid model by 20265 Increase in deployment of edge computing platforms by private mobile networks4 Organizations use private or both public & private infrastructure for GenAI work1 Creates new opportunities to innovate and serve our customers Dell’s markets are
Slide 17: Dell Technologies strategy
Dell Technologies strategy Leverage our strengths to extend our leadership and capture new growth Unique operating model Innovation Culture Customer-centricity Leading end-to-end solutions #1 Commercial PC Workstations PC Monitors High-end Gaming Server External Storage Storage Software Data Protect
Slide 18: There is no stopping the pace of innovation
There is no stopping the pace of innovation Each era builds on the next 1) Revenue presented as of the most recently filed, publicly available information. Please refer to relevant filings for basis of presentation. $B Client-server Mobile Public cloud AI Dell revenue1 Internet Virtualization Data O
Slide 19: Infrastructure Solutions Group Strategy
Infrastructure Solutions Group Strategy Arthur Lewis President, Infrastructure Solutions Group
Slide 20: ISG executive summary
ISG executive summary We have demonstrated strong long-term growth and profitability across financial cycles Technology trends and workloads continue to evolve in our direction, and we are well positioned to capture growth and drive profitability We are innovating across our portfolio to extend our
Slide 21: Steady financial performance & strong leadership positions
Steady financial performance & strong leadership positions Long-term growth across financial cycles, well positioned to capture growth and increase profitability ISG P&L performance1 Strong #1 leadership positions2 Revenue Opinc Innovating around technology trends to drive growth and increase profit
Slide 22: Extending our leadership position in servers
Extending our leadership position in servers Market leader (#1 in x86 and Mainstream), innovator and structural share gainer Mainstream server share1 +980 bps share gain over the past 10 years Innovation 16G Servers Purpose built to support a wide range of workloads Advanced automation with built-in
Slide 23: Extending our leadership position in storage
Extending our leadership position in storage Market leader in Data Storage (#1 in external RAID storage), innovator and share consolidator External storage share1 +250 bps share gain since the EMC acquisition Innovation Power Portfolio Leading purpose-built portfolio PowerMax & PowerStore Leading so
Slide 24: Growing global ISG TAM and macro trends
Growing global ISG TAM1 and macro trends 1) Storage includes Core Storage, Data Protection, and HCI; Server is total server less HCI HW; Dell estimates based on data from IDC (Server, Storage) and Dell’Oro (Networking), September 2023. Macro trends shaping our opportunity 2027 $199B $229B $265B +7%
Slide 25: AI will drive a wave of growth
AI will drive a wave of growth 75% of organizations are increasing budgets to pursue AI1 AI HW & services represent a $124B opportunity by 20272 2023 2025 2027 $B $91B $124B Hardware Services Our three-pronged approach Purpose-built solutions Strategic partnerships and ecosystems AI consulting and p
Slide 26: Client Solutions Group Strategy
Client Solutions Group Strategy Sam Burd President, Client Solutions Group
Slide 27: CSG executive summary
CSG executive summary We have demonstrated strong performance across financial cycles and remain well-positioned to capitalize on the next set of growth opportunities Not all PCs are created equal; we remain focused on the most profitable segments while extending our leadership and capturing new gro
Slide 28: Steady financial performance & strong leadership positions
Steady financial performance & strong leadership positions Long-term growth across financial cycles, well positioned to capture growth and increase profitability CSG P&L performance1 Strong leadership positions Revenue Strong share gain track record #1 ~5% CAGR ~9pt increase Monitors6 ~10pt increase
Slide 29: We focus on the most valuable segments
We focus on the most valuable segments Not all PCs are created equal; we focus on Commercial PCs, Workstations, Premium Consumer PCs and Gaming Our unique business model drives differentiated results Our total revenue per unit (TRU) is nearly 2x primary competitors Primary Competitors TRU2 Dell CSG
Slide 30: Commercial installed base ready for a refresh
Commercial installed base is largest in history and ready for a refresh AI workloads and assistants will require richer configurations and accelerate refresh rates The ecosystem around the PC is more important than ever to support hybrid work AI-driven workloads & hybrid work support continued TAM g
Slide 31: Investing in our Client Peripherals strategy
Investing in our Client Peripherals strategy Enhance end-user productivity and simplify IT with comprehensive Dell-on-Dell client ecosystem Extend leadership position in $30B displays industry to $40B+ core Client Peripherals industry1 Organically build compelling portfolio of productivity-enhancing
Slide 32: Value Creation & Capital Allocation
Value Creation & Capital Allocation Yvonne McGill Executive Vice President & Chief Financial Officer
Slide 33: Long-term value creation framework
Long-term value creation framework Expect 3-4% revenue growth, outpacing GDP1, as we extend our leadership positions and capture new growth Expect 8%+ non-GAAP diluted EPS2 growth driven by profitable growth in both ISG and CSG over time Expect net income to adj. FCF conversion of 100% or better, dr
Slide 34: GDP+ revenue growth target of 3-4%
GDP+ revenue growth target of 3-4% supported by our unique operating model, ability to extend our leadership and capture new growth Revenue Growth +3.6% CAGR FY18-FY24E Non-GAAP Revenue ($B)1 +15% +1% +2% +17% 3-4% DELL TECH LONG-TERM REVENUE CAGR #1 position Client revenue3 Focused on most profitab
Slide 35: EPS target supported by multiple levers
EPS target supported by our ability to pull multiple levers to generate strong performance across economic cycles EPS Growth Multiple levers to drive EPS growth Cumulative share repurchases 8%+ DELL TECH LONG-TERM DILUTED EPS CAGR +6.5% CAGR FY20-FY24E Non-GAAP Diluted EPS1 Share Repurchase Gross Ma
Slide 36: Business model that consistently delivered strong cash flow
Executing a business model that has consistently delivered strong cash flow Cash Flow $18.5B Adj. FCF generated over last 4 years 115% Avg. net income to adj. FCF conversion over last 4 years1 $4.6B Average Adjusted Free Cash Flow ($B)2 GDP/GDP+ Revenue Growth Industry’s largest GTM engine Track rec
Slide 37: Returning 80%+ of Adjusted FCF to shareholders
Returning more to shareholders, 80%+ of Adjusted FCF through share repurchases & dividends Target return of adjusted FCF to shareholders Drive growth while maintaining investment grade rating Committed to IG rating & 1.5x core leverage target Disciplined, tuck-in M&A that accelerates our strategy Lo
Slide 38: Our strategy and track record have us well positioned
Our strategy, operating model and track record of execution have us well positioned Committed to long-term value creation Attractive long-term financial framework 3 - 4% Revenue growth 8%+ Diluted EPS growth 100%+ NI to adj. FCF Conversion 80%+ Target return of adj. FCF to shareholders 10%+ Dividend
Slide 39: Closing Remarks
Closing Remarks Michael Dell Chairman and Chief Executive Officer
Slide 40: Strategy and closing thoughts
Strategy and closing thoughts We are growing revenue, cash flow and earnings backed by operational excellence Our strategy, operational advantages and track record of execution have us well positioned We are committed to driving long-term value with growing capital return Data and technology are cen
Slide 41: Appendix A: Debt Summary
SECURITIES ANALYST MEETING. | | | | | | | | OCTOBER 5, 2023 Appendix A ee esl Debt Summary | | | | | | |
Slide 42: Debt summary
Debt summary 1) Amounts are based on underlying data and may not visually foot due to rounding. 2) Principal Face Value. 3) Core debt represents the total principal amount of our debt, less: (a) public subsidiary debt, (b) DFS related debt, and (c) other debt.
Slide 43: Appendix B: Consolidated GAAP and non-GAAP financial statements
Consolidated GAAP and non-GAAP financial statements Appendix B
Slide 44: Supplemental non-GAAP measures: Non-GAAP revenue FY18
Supplemental non-GAAP measures Non-GAAP revenue FY18 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. This represents Dell Technologies non-GAAP net revenue, excluding VMware, adjusted to include the impact of currently estimated
Slide 45: Supplemental non-GAAP measures: Non-GAAP revenue FY19-FY24E
Supplemental non-GAAP measures Non-GAAP revenue FY19-FY24E Amounts are based on underlying data and may not visually foot due to rounding. This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. FY19 revenue represents unaudited pro form
Slide 46: Supplemental non-GAAP measures: Non-GAAP net income FY19
Supplemental non-GAAP measures Non-GAAP net income FY19 Q3 and Q4 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. Consists of acquisition, integration, and divestiture-related costs, as well as the costs incurred in the Class V t
Slide 47: Supplemental non-GAAP measures: Non-GAAP net income FY20 and FY21
Supplemental non-GAAP measures Non-GAAP net income FY20 and FY21 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. Consists of acquisition, integration, and divestiture-related costs and gains. Consists of severance, facilities act
Slide 48: Supplemental non-GAAP measures: Non-GAAP net income FY22
Supplemental non-GAAP measures Non-GAAP net income FY22 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. Consists of acquisition, integration, and divestiture-related costs and gains. Consists of severance, facilities action and i
Slide 49: Supplemental non-GAAP measures: Non-GAAP net income FY23 to FY24 Q2
Supplemental non-GAAP measures Non-GAAP net income FY23 to FY24 Q2 This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction in 3Q17. Consists of acquisition, integration, and divestiture-related costs and gains. Consists of severance, facilities a
Slide 50: Supplemental non-GAAP measures: Non-GAAP EPS FY19
Supplemental non-GAAP measures Non-GAAP earnings per share FY19 Q3 and Q4 Adjustments give effects of the Class V transaction, including the elimination of investment income related to the liquidation of VMware’s cash, cash equivalents, and investments in order to fund the special dividend and inter
Slide 51: Supplemental non-GAAP measures: Non-GAAP EPS FY20 to FY22
Supplemental non-GAAP measures Non-GAAP earnings per share FY20 to FY22
Slide 52: Supplemental non-GAAP measures: Non-GAAP EPS FY23 to FY24 Q2
Supplemental non-GAAP measures Non-GAAP earnings per share FY23 to FY24 Q2
Slide 53: Supplemental non-GAAP measures: Adjusted Free Cash Flow FY19
Supplemental non-GAAP measures Adjusted Free Cash Flow FY19 Q3 and Q4 Amounts are based on underlying data and may not visually foot due to rounding.
Slide 54: Supplemental non-GAAP measures: Adjusted Free Cash Flow FY20 to FY22
Supplemental non-GAAP measures Adjusted Free Cash Flow FY20 to FY22 Amounts are based on underlying data and may not visually foot due to rounding. Amount represents change in net carrying value of equipment for DFS operating leases.
Slide 55: Supplemental non-GAAP measures: Adjusted Free Cash Flow FY23 to FY24 Q2
Supplemental non-GAAP measures Adjusted Free Cash Flow FY23 to FY24 Q2 Amounts are based on underlying data and may not visually foot due to rounding. Amount represents change in net carrying value of equipment for DFS operating leases.
Slide 56: Appendix C: Guidance
SECURITIES ANALYST MEETING. | | | | | | | | OCTOBER 5, 2023 Appendix C ee esl Guidance lL) td tld
Slide 57: Supplemental non-GAAP measures: Financial Guidance
Supplemental non-GAAP measures Financial Guidance1 Amounts are subject to change with no obligation to reconcile these estimates. Amounts may not visually foot due to underlying data. No estimates are included for 3Q-4QFY24 guidance purposes on potential fair value adjustments on strategic investmen
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