Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q2 2005 Earnings Presentation
25 slides from Unisys Corporation New's earnings presentation, Jul 20, 2005
Slide 1: 2Q05 Financial Release
2Q05 Financial Release July 20, 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: Second-Quarter 2005 Strategic Update
Second-Quarter 2005 Strategic Update Joe McGrath President & CEO
Slide 4: 2Q05 Overview
Slide 1 2Q05 Overview Working through transitional period in business 2Q05 came in as expected • Loss of 8 cents per share on GAAP basis • Net income of 1 cent per share excluding pension expense Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investo
Slide 5: Strategic Review
Slide 2 Strategic Review Made progress in 1H05 in repositioning the business for future growth Unisys strategy: Pursue and capture selective, value- added opportunities in services, technology Service focus areas: • Systems integration/consulting … outsourcing … infrastructure services … enterprise
Slide 6: Repositioning – Strategic Priorities
Slide 3 Repositioning – Strategic Priorities Rebuild sales and marketing program to drive stronger order and revenue growth Lower corporate cost base through short- and long-term actions Address operational issues in challenging outsourcing operations
Slide 7: Priority #1: Strengthen Sales/Marketing
Slide 4 Priority #1: Strengthen Sales/Marketing Goal: Drive stronger order/revenue growth Broad-based effort led by Peter Blackmore Sales: Strengthen business development … adjust coverage model … selective recruiting Alliances: Establish new growth programs Marketing: Centralize marketing programs
Slide 8: Continued Order Momentum in 2Q05
Slide 5 Continued Order Momentum in 2Q05 Double-digit services order growth in quarter Significant order gains for systems integration and consulting, infrastructure services, ES7000 Significant contracts with: • State of New Jersey – Medicaid services • Group of U.S. telecommunications providers •
Slide 9: Order Momentum – 2Q05
Slide 6 Order Momentum – 2Q05 Good order activity for key targeted programs Services: 3D-VE methodology and solutions • Helped drive double-digit order growth for consulting/systems integration solutions • Pursuing 200+ opportunities with overall potential value in billions Technology: ES7000 server
Slide 10: Continued Progress in Cost Reduction
Slide 7 Continued Progress in Cost Reduction Essentially completed 3Q04 cost reduction actions Continued to expand global sourcing program • Establishing new global service centers in Hungary and China Beginning to see benefit of cost reduction efforts • Continue to target reducing SG&A expense, exc
Slide 11: Update – Outsourcing Operations
Slide 8 Update – Outsourcing Operations Working proactively to address issues in challenging outsourcing operations Two large BPO operations are significantly impacting margins • Taking longer than expected to work through issues • Both are multi-client utility operations In discussions to renegotia
Slide 12: Summary
Slide 9 Summary Made progress in 2Q05 in strategic focus areas Double-digit order growth overall Services revenue growth … double-digit services order growth Progress in reducing costs Continue to make progress in challenging outsourcing operations Look for continued progress in 2H05
Slide 13: Financial Review
Financial Review Janet Haugen Chief Financial Officer
Slide 14: 2Q05 Order Performance
Slide 10 2Q05 Order Performance Overall double-digit order growth Growth in both services and technology orders Services orders grew double-digits, driven by infrastructure services, consulting/systems integration Technology orders showed good growth, driven by ES7000
Slide 15: 2Q05 Financial Results
Slide 11 2Q05 Financial Results 2Q05 2Q04 Revenue $1,436M $1,388M Operating Margin – As Reported (3.9%) 1.6% Net Income (Loss) – As Reported ($27M) $19M Earnings (Loss) Per Share – As Reported (8 cents) 6 cents Operating Margin – (0.8%) 3.4% Excluding Pension Expense Net Income – $4M $36M Excluding
Slide 16: 2Q05 Revenue by Geography
Slide 12 2Q05 Revenue by Geography Revenue: $1,436 Million 2Q05 % Americas Customer Change 8% Revenue vs. 2Q04 Pacific Asia United States $671M 6% 12% United States International $765M 1% 47% Europe/ Africa Total $1,436M 3% 33%
Slide 17: 2Q05 Revenue by Business Segment
Slide 13 2Q05 Revenue by Business Segment Revenue: $1,436 Million 2Q05 % Change Customer vs. Services Revenue 2Q04 86% Services $1,236M 7% Technology $200M -13% Overall $1,436M 3% Technology 14%
Slide 18: 2Q05 Services Revenue Breakdown
Slide 14 2Q05 Services Revenue Breakdown Customer Revenue: $1,236 Million 2Q05 Core Customer % Change Maint. vs. 2Q04 Revenue 10% Infrastr. Consulting/ Consulting/SI $443M 7% Services Systems Int. Outsourcing $473M 13% 16% 36% Infrastructure $192M 7% Services Outsourcing Core $128M -12% Maintenance
Slide 19: 2Q05 Technology Revenue Breakdown
Slide 15 2Q05 Technology Revenue Breakdown Customer Revenue: $200 Million 2Q05 % Change Specialized Customer vs. Technology Revenue 2Q04 17% Enterprise $166M -10% Servers Enterprise Specialized $34M -24% Technology Servers 83% Overall $200M -13%
Slide 20: 2Q05 Overall Operating Margins
Slide 16 2Q05 Overall Operating Margins Reported (GAAP) Excluding Pension Expense 6% 6% 4% 4% 3.4% 2% 2% 1.6% 0% 0% -0.8% -2% -2% -3.9% -4% -4% -6% -6% 2Q04 2Q05 2Q04 2Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at www.unisys.com/
Slide 21: 2Q05 Services Operating Margins
Slide 17 2Q05 Services Operating Margins Reported (GAAP) Excluding Pension Expense 6% 6% 4% 4% 2% 2% 2.5% 0.7% -0.6% 0% 0% -2% -2% -3.7% -4% -4% -6% -6% 2Q04 2Q05 2Q04 2Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at www.unisys.com
Slide 22: 2Q05 Technology Operating Margins
Slide 18 2Q05 Technology Operating Margins Reported (GAAP) Excluding Pension Expense 8% 8% 6% 6% 6.7% 4% 4% 5.4% 2% 2% 0% 0% -2.1% -2% -2% -4.8% -4% -4% -6% -6% -8% -8% 2Q04 2Q05 2Q04 2Q05 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web a
Slide 23: 2Q05 Cash Flow
Slide 19 2Q05 Cash Flow 2Q05 2Q04 Cash Flow From Operations $64M $108M Capital Expenditures $112M $114M % Revenue-Generating Cap Ex 68% 67% Free Cash Flow (Usage) ($48M) ($6M) Depreciation & Amortization $93M $99M Please refer to reconciliation of GAAP to non-GAAP financial information available on
Slide 24: Financial Outlook
Slide 20 Financial Outlook Third-quarter 2005 • EPS excluding pension expense of between 4 to 6 cents • Mid single-digit revenue growth from prior-year levels Full-year 2005: • EPS excluding pension expense in the 33 - 38 cents range • Low single-digit revenue growth from prior-year levels Please re
Slide 25: Questions & Answers
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