Avaya — Thomas Weisel Partners Tech 2004 Conference
10 slides from Avaya's conference presentation, February 2004
Slide 1: Thomas Weisel Partners Tech 2004 Conference
Thomas Weisel Partners Tech 2004 Conference Garry K. McGuire CFO and SVP Corporate Development February 2004 Copyright© 2004 Avaya Inc. All rights reserved
Slide 2: Forward Looking Statement
Forward Looking Statement The use of words, such as “may”, “might”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “intends”, “future”, “potential” or “continue”, the negative of these terms and other comparable terminology are intended to identify forward- looking sta
Slide 3: Investment Thesis
Investment Thesis Strategic Leverageable Differentiation Business Avaya Model Shareholder Value Technology Transition 3
Slide 4: Strategic Differentiation
Strategic Differentiation • Clear focus on the enterprise • Voice experience and expertise Small & Medium • Significant installed customer base Business Solutions (SMBS) 6% • Global services organization Enterprise Communications • Comprehensive suite of Group (ECG) 46% voice applications • Customer
Slide 5: Strategic Differentiation: World-Class IP Telephony Technology
Strategic Differentiation World-Class IP Telephony Technology Value Proposition Scalability Security & Reliability • Migration choices • 12K IP endpoints • Hardened Linux servers • Over 700 features per server • Advanced Encryption • Investment • 300K busy hour • IP and TDM redundancy protection cal
Slide 6: Technology Transition
Technology Transition Global IP Telephony Transition Opportunity And Strategy • Average age of installed base = ~ 10 yrs • Typical lifespan of a PBX = ~ 7 to 10 yrs • Global installed lines = ~ 400M • Global installed IP lines = ~ 7M 400M North Migrate America Global 300M installed Leverage 7M of IP
Slide 7: IP Telephony Momentum
Technology Transition IP Telephony Momentum Worldwide IP Telephony Market Share – 3Q CY03 Avaya 50% Cisco Nortel 40% Market Share Trend Alcatel Siemens 30% 20% Avaya = 20% 10% 0% 1Q 3Q CY00 CY03 Market - 3Q CY03 Rank Share Source: US Enterprise Telephony #1 21% Synergy Research InfoTech WW Enterpris
Slide 8: Leveraging Global Presence in Applications
Technology Transition Leveraging Global Presence in Applications North America Call Center Western Europe Call Center Asia Pacific Call Center 47% 50% 50% 50% 40% 35% 40% 33% 40% 30% 24% 30% 30% 17% 20% 20% 20% 13% 12% 12% 7% 7% 7% 7% 6% 10% 5% 10% 10% 5% 0% 0% 0% Avaya Nortel Siemens Aspect Rockwel
Slide 9: Leverageable Business Model
Leverageable Business Model Q1 FY04 Targeted Metrics Results By Q4 FY04 In 2H FY05 Gross Margin 46.1% 43% to 45% 45% to 47% SG&A 32.2% 27% to 29% 25% to 27% R&D 8.5% 8% to 10% 8% to 10% Operating Margin 5.4% 6% to 7% 10% to 12% Guidance for Q2 FY04 • Sequential revenue growth in addition to a full q
Slide 10: Thomas Weisel Partners Tech 2004 Conference
Thomas Weisel Partners Tech 2004 Conference Garry K. McGuire CFO and SVP Corporate Development February 2004 Copyright© 2004 Avaya Inc. All rights reserved