Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Q1 2024 Earnings Presentation
25 slides from Unisys Corporation New's earnings presentation, May 8, 2024
Slide 1: First Quarter 2024 Financial Results
First Quarter Peter Altabef Chair and CEO 2024 Financial Results Deb McCann CFO MAY 7, 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: 1Q24 Highlights
1Q24 Highlights Revenue Operating Profit & Free Cash Flow First quarter revenue ahead of expectations: due to better-than-expected L&S revenue, though still down 1Q operating profit slightly better than expected: operating (5.5%) and (7.1%) in CC due to timing of license renewals margin of 3.6% and
Slide 4: 1Q Revenue ($M)
1Q Revenue ($M) COMPANY DWS CA&I ECS (5.5%) YoY (7.1%) cc1 YoY +4.0% YoY Flat in cc1, or up 1.0% as Up 2.3% in cc1, or up 2.4% Down 24.4% in cc1, or 21.9% +3.0% cc1 YoY reported as reported as reported $516 $488 $380 $395 $188 $131 $132 $126 $129 $147 2023 2024 2023 2024 2023 2024 2023 2024 2023 202
Slide 5: 1Q Gross Margins
1Q Gross Margins COMPANY DWS CA&I ECS 890 bps contraction (290 bps) YoY 250 bps expansion 360 bps expansion +420 bps YoY 66.7% 30.8% 27.9% 57.8% 18.0% 13.8% 11.9% 14.4% 13.0% 16.6% 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 1 Total Company Ex-L&S Contraction of total company margin due to tim
Slide 6: 1Q Profitability and Free Cash Flow ($M, except per share data)
1Q Profitability and Free Cash Flow ($M, except per share data) 1Q GAAP & Non-GAAP1 Operating 1Q GAAP Net Income & 1Q GAAP & Non-GAAP1 Diluted 1Q Operating Cash Flow Profit & Margins Adj. EBITDA1 and Margins Earnings Per Share & Free Cash Flow1 11.6% 9.7% $24 19.0% $60 7.1% 13.4% $98 $13 $50 3.6% $3
Slide 7: 1Q24 EBITDA and Cash Flow Detail
1Q24 EBITDA and Cash Flow Detail $M 1Q24 1Q23 EBITDA 1 ($ 104.2) ($ 117.8) ADJUSTED EBITDA 1 $ 65.3 $ 98.2 ADJUSTED EBITDA MARGIN 1 13.4% 19.0% OPERATING CASH FLOW $ 23.8 $ 12.8 CAPITAL EXPENDITURES ($ 19.9) ($ 20.3) FREE CASH FLOW 1 $ 3.9 ($ 7.5) PRE-PENSION AND POSTRETIREMENT FREE CASH FLOW 1 $ 11
Slide 8: Leverage Detail
Leverage Detail $M MARCH 31, 2024 SENIOR SECURED NOTES 1 $ 485.0 FINANCE LEASES AND OTHER DEBT 17.7 TOTAL DEBT $ 502.7 GLOBAL NET PENSION DEFICIT (AS OF DEC 31, 2023) 703.0 TOTAL DEBT INCLUDING PENSION DEFICIT $ 1,205.7 CASH $ 382.8 NET LEVERAGE $ 119.9 NET LEVERAGE INCLUDING PENSION DEFICIT $ 822.9
Slide 9: Reiterating Financial Guidance
Revenue Growth in Constant Currency (1.5%) to 1.5% Reiterating Non-GAAP Operating Profit Margin 5.5% to 7.5% Financial Guidance Assumptions & Other 2024 Expectations Guidance • Constant currency revenue guidance implies (1.6%) to 1.4% revenue growth as Full-Year 2024 reported, based on recent exchan
Slide 10: Potential Economic Benefit of Tax Assets
Potential Economic Benefit of Tax Assets FUTURE AVAILABLE NET DEFERRED TAX $M DESCRIPTION REDUCTIONS IN ASSETS 1 TAXABLE INCOME U.S. NOLS AND TAX CREDITS : NET OPERATING LOSS – FEDERAL & STATE $ 546 $1,743 TAX CREDITS 112 533 PENSION AND OTHER: PENSION 127 519 OTHER DEFERRED TAX ASSETS 99 405 TOTAL
Slide 11: Appendix
Appendix ws unisys
Slide 12: 1Q 2024 Revenue Profile
11% 1Q 2024 16% 30% Revenue Profile 12% SEGMENT GEOGRAPHY 45% 27% 32% 27% US & Canada EMEA ECS DWS CA&I All Other Asia Pacific Latin America Highly diverse revenue base that is ~80% recurring 35% 19% 32% CLIENT Ex-L&S MIX 81% SECTOR OF TOTAL COMPANY REVENUE 33% Commercial Financial Services Ex-L&S S
Slide 13: Our Approach to Data Analytics, AI & Generative AI
Our Approach to Data Analytics, AI & Generative AI We utilize deep client relationships, industry insights, and thought leadership to develop high value capabilities for our clients delivered through advisory, tailored and industry-specific solutions Insights & Relationships Delivery & Value Realiza
Slide 14: Unisys Logistics Optimization
Unisys Logistics Optimization Pre-trained data models 01 Optimize logistics management processes Built-in machine learning 02 Optimizes models with no data training required An advanced analytics solution that uses quantum annealing to compile multiple disparate data sources to Quantum annealing com
Slide 15: Connect your most important dots
Connect your most important dots Capacity Predict and prescribe optimal pallet & unit load device builds, allowing for day-of-departure changes to maximize and unused cargo space Optimizing the whole supply Inventory chain to increase revenue, Optimize inventory levels & location, freight sensitivit
Slide 16: Excluding License and Support (Ex-L&S)
Excluding License and Support (Ex-L&S) $M 1Q24 1Q23 REVENUE $ 487.8 $ 516.4 L&S REVENUE 93.2 136.9 EX-L&S NON-GAAP REVENUE $ 394.6 $ 379.5 GROSS PROFIT $ 136.0 $ 159.0 L&S GROSS PROFIT 64.8 106.5 EX-L&S NON-GAAP GROSS PROFIT $ 71.2 $ 52.5 GROSS PROFIT MARGIN 27.9% 30.8% EX-L&S NON-GAAP GROSS PROFIT
Slide 17: Non-GAAP Operating Profit
Non-GAAP Operating Profit $M 1Q24 1Q23 GAAP OPERATING INCOME $ 17.7 $ 49.9 CERTAIN LEGAL MATTERS 1 7.3 5.7 COST REDUCTION AND OTHER EXPENSES 2 9.0 4.2 PENSION AND POSTRETIREMENT EXPENSE 1 0.4 0.3 NON-GAAP OPERATING PROFIT $ 34.4 $ 60.1 REVENUE $ 487.8 $ 516.4 GAAP OPERATING PROFIT MARGIN 3.6% 9.7% N
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $M 1Q24 1Q23 NET LOSS ATTRIBUTABLE TO UNISYS ($ 149.5) ($ 175.4) NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 0.2 0.9 INTEREST EXPENSE, NET OF INTEREST INCOME OF $6.6 AND $6.7, 1.3 0.9 RESPECTIVELY 1 PROVISION FOR INCOME TAXES 17.0 19.9 DEPRECIATION 12.4 21.4 AM
Slide 19: Non-GAAP Net Income
Non-GAAP Net Income $M EXCEPT SHARE AND PER SHARE DATA 1Q24 1Q23 GAAP NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION ($ 149.5) ($ 175.4) PENSION & POSTRETIREMENT EXPENSE: PRETAX 146.6 193.2 TAX 0.1 (0.2) NET OF TAX $ 146.5 $ 193.4 CERTAIN LEGAL MATTERS: PRETAX (8.2) 5.7 TAX (2.8) - NET OF TAX ($ 5.4) $
Slide 20: Non-GAAP Diluted Earnings Per Share
Non-GAAP Diluted Earnings Per Share $M EXCEPT SHARE AND PER SHARE DATA 1Q24 1Q23 NON-GAAP NET INCOME ATTRIBUTABLE TO UNISYS CORPORATION $ 2.7 $ 34.7 WEIGHTED AVERAGE SHARES (THOUSANDS) 68,704 67,943 PLUS INCREMENTAL FROM ASSUMED CONVERSION OF EMPLOYEE STOCK PLANS 2,267 391 NON-GAAP DILUTED WEIGHTED
Slide 21: Adjusted Free Cash Flow
Adjusted Free Cash Flow $M 1Q24 1Q23 CASH PROVIDED BY OPERATIONS $ 23.8 $ 12.8 ADDITIONS TO MARKETABLE SOFTWARE (13.2) (10.3) ADDITIONS TO PROPERTIES (2.2) (7.3) ADDITIONS TO OUTSOURCING ASSETS (4.5) (2.7) FREE CASH FLOW $ 3.9 ($ 7.5) PENSION AND POSTRETIREMENT FUNDING 7.7 16.4 PRE-PENSION AND POSTR
Slide 22: Non-GAAP Net Income Margin
Non-GAAP Net Income Margin $M 1Q24 1Q23 REVENUE $ 487.8 $ 516.4 NET LOSS ATTRIBUTABLE TO UNISYS ($ 149.5) ($ 175.4) NON-GAAP NET INCOME ATTRIBUTABLE TO UNISYS $ 2.7 $ 34.7 NET LOSS AS A % OF REVENUE (30.6%) (34.0%) NON-GAAP NET INCOME AS A % OF REVENUE 0.6% 6.7%
Slide 23: Unisys Segment and Solutions Map
Unisys Segment and Solutions Map SEGMENT / REPORTING DESCRIPTION NEXT-GEN SOLUTIONS TRADITIONAL SOLUTIONS We advise and execute the deployment, Modern Workplace: unified communications Traditional Workplace: traditional Digital Workplace integration and management of technologies, & collaboration (U
Slide 24: Definitions of Non-GAAP Financial Metrics
Definitions of Non-GAAP Financial Metrics Non-GAAP operating profit – This measure excludes pretax pension and postretirement expense and pretax charges in connection with certain legal matters related to professional services and legal fees, including legal defense costs, associated with certain le
Slide 25: 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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