Slide 1: 4th Quarter FY 2019 Earnings Presentation
4th Quarter FY 2019 Earnings Presentation May 23, 2019
Slide 2: Non-GAAP financial measures
Non-GAAP financial measures We present non-GAAP financial measures of performance which are derived from the unaudited condensed consolidated statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), EBIT margin, adjusted EBIT, adjusted E
Slide 3: Forward-looking statements
Forward-looking statements All statements in this presentation that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statem
Slide 4: Consolidated statements of operations
Consolidated statements of operations (preliminary and unaudited) Q4 Full Year in millions, except per-share amounts FY19 FY18 FY19 FY18 Revenue $ 5,280 $ 5,584 $ 20,753 $ 21,733 Costs of services 3,836 4,087 14,946 16,317 Selling, general and administrative 459 406 1,959 1,890 Depreciation and amor
Slide 5: 4th Quarter FY 2019 - Mike Lawrie
4th Quarter FY 2019 Earnings Presentation Mike Lawrie Chairman, President and Chief Executive Officer
Slide 6: Key messages
Key messages Strong fourth quarter and FY19 results(1): • $2.19 Q4 non-GAAP EPS; $8.34 FY19 non-GAAP EPS • 15.7% Q4 adj. EBIT margin; 15.8% FY19 adj. EBIT margin • $917M Q4 adj. free cash flow; $2.1B FY19 adj. free cash flow $5.28B Q4 revenue — up more than $100M sequentially; $20.8B FY19 revenue St
Slide 7: 4th Quarter FY 2019 - Paul Saleh
4th Quarter FY 2019 Earnings Presentation Paul Saleh Executive Vice President and Chief Financial Officer
Slide 8: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results Q4 FY19 Transaction, Amortization of Pension and OPEB Restructuring Separation and Tax Non-GAAP (in millions except EPS) GAAP Acquired Intangible Actuarial and Costs Integration-Related Adjustment Results Assets Settlement Losses Costs Income from continuing operat
Slide 9: 4th quarter results
4th quarter results Q4 Full Year FY19 FY18 FY19 FY18 Revenue ($M) $ 5,280 $ 5,584 $ 20,753 $ 21,733 – YoY Growth – GAAP (5.4%) (4.5%) – YoY Growth – cc (1.0%) (2.9%) – QtQ Growth – GAAP 2.0% — – QtQ Growth – cc 1.7% — Adjusted EBIT ($M) 827 882 3,269 2,989 Adjusted EBIT Margin (%) 15.7% 15.8% 15.8%
Slide 10: Global Business Services (GBS)
Global Business Services (GBS) Q4 FY19 Q4 FY18 FY19 FY18 Revenue ($M) $ 2,191 $ 2,361 $ 8,684 $ 9,254 – YoY Growth – GAAP (7.2%) (6.2%) – YoY Growth – cc (3.1%) (4.7%) – QtQ growth – GAAP 1.0% — – QtQ growth – cc 0.9% — GBS Profit ($M) 447 459 1,645 1,525 GBS Profit Margin (%) 20.4% 19.4% 18.9% 16.5
Slide 11: Global Infrastructure Services (GIS)
Global Infrastructure Services (GIS) Q4 FY19 Q4 FY18 FY19 FY18 Revenue ($M) $ 3,089 $ 3,223 $ 12,069 $ 12,479 – YoY Growth – GAAP (4.2%) (3.3%) – YoY Growth – cc 0.6% (1.6%) – QtQ growth – GAAP 2.7% — – QtQ growth – cc 2.3% — GIS Profit ($M) 436 472 1,911 1,643 GIS Profit Margin (%) 14.1% 14.6% 15.8
Slide 12: Financial highlights
Financial highlights Q4 FY19 FY19 Cash Flow ► Adjusted Free Cash Flow $917M $2,105M Performance ► Cap Ex — Including Payments on Capital Leases $316M $1,145M ► Cap Ex as a % of Revenue 6.0% 5.5% Q4 FY19 FY19 Capital to Capital to ► Cash Dividends $51M $210M Shareholders Shareholders $91M $1,339M ► S
Slide 13: FY 2020 targets
FY 2020 targets(1) Revenue $20.7B – $21.2B Non-GAAP EPS(2) $7.75 – $8.50 Adjusted Free Cash Flow 90% of Adj. Net Income(2) 1 FY20 targets assume that the Luxoft transaction closes by the end of June 2 Excludes restructuring costs, transaction, separation and integration-related costs, amortization o
Slide 14: Bookings
Bookings(1) FY18 FY19 $B $5.7 $5.8 $4.9 $4.7 $4.6 $2.3 $2.9 $2.0 $2.0 $2.2 $3.4 $2.9 $2.6 $2.5 $2.9 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 GBS Global Business Services GIS Global Infrastructure Services 1 The summation of the quarter bookings number may not equal the full-year number, due to roundi
Slide 15: Supplemental Information
4th Quarter FY 2019 Earnings Presentation Supplemental Information
Slide 16: Non-GAAP reconciliations
Non-GAAP reconciliations EBIT and Adjusted EBIT (in millions) Q4 FY19 Q4 FY18 FY19 FY18 Net income $ 271 $ 565 $ 1,262 $ 1,782 Income from discontinued operations, net of taxes - (38) (35) (236) Income tax expense (benefit) 83 61 288 (242) Interest income (36) (30) (128) (89) Interest expense 85 100
Slide 17: Non-GAAP reconciliations
Non-GAAP reconciliations Segment profit (in millions) Q4 FY19 Q4 FY18 FY19 FY18 GBS profit $ 447 $ 459 $ 1,645 $ 1,525 GIS profit 436 472 1,911 1,643 All other loss (56) (49) (287) (179) Interest income 36 30 128 89 Interest expense (85) (100) (334) (320) Restructuring costs (47) (204) (465) (789) T
Slide 18: Q4 FY19 non-GAAP results
Q4 FY19 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Results Intangible Assets Related Costs Losses Cost of services (excludes depreciation and amortization and
Slide 19: FY19 non-GAAP results
FY19 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Adjustment Results Intangible Assets Related Costs Losses Cost of services (excludes depreciation and amort
Slide 20: Q4 FY18 non-GAAP results
Q4 FY18 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Adjustment Results Intangible Assets Related Costs Gains Cost of services (excludes depreciation and amo
Slide 21: FY18 non-GAAP results
FY18 non-GAAP results Transaction, Pension and Amortization of Restructuring Separation and OPEB Actuarial Tax Non-GAAP (in millions except EPS) GAAP Acquired Costs Integration- and Settlement Adjustment Results Intangible Assets Related Costs Gains Cost of services (excludes depreciation and amorti
Slide 22: Adjusted free cash flow
Adjusted free cash flow (in millions) Q4 FY19 FY19 Net cash provided by operating activities $ 748 $ 1,783 Net cash provided by investing activities 109 69 Acquisitions, net of cash acquired 33 365 Business dispositions - 65 Payments on capital leases and other long-term asset financings (234) (944)
Slide 23: Non-GAAP and other definitions
Non-GAAP and other definitions Segment profit: Segment revenue less costs of services, segment selling, general and administrative, depreciation and amortization, and other income, excluding the movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities an
Slide 24: DXC.technology
v DXC.technology D,