Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q3 2008 Earnings Presentation
21 slides from Unisys Corporation New's earnings presentation, Oct 30, 2008
Slide 1: 3Q08 Financial Results
3Q08 Financial Results October 30, 2008 Ed Coleman Janet Haugen Jack McHale Chairman & CEO Chief Financial Officer Investor Relations Officer Webcast available on www.unisys.com/investor
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 assumptio
Slide 3: 3Q08 Overview
Slide 1 3Q08 Overview • Difficult quarter for Unisys • Results impacted by economic uncertainties in key markets – Primarily financial services … also softness in U.S. federal – Reduced revenue volume impacted services margins • Key positives – Growth in non-federal public sector business – Strong s
Slide 4: 3Q08 Financial Results
Slide 2 3Q08 Financial Results $M 3Q08 3Q07 Y/Y Ch Revenue $1,312 $1,393 -6% Net Pre-Tax Cost Reduction Charges $3.9 ($1.8) $5.7 Retirement-Related Expense ($3.7) $22.8 ($26.5) Operating Profit $37.9 $43.6 ($5.7) Interest Expense $21.5 $18.5 $3.0 Other Income/(Expense) ($6.1) ($19.3) $13.2 Pretax In
Slide 5: Order & Revenue – Overview
Slide 3 Order & Revenue – Overview • Orders – Double-digit decline in services orders – Weakness across industries, geographies … slight order growth in non-federal public sector • Revenue – About half of revenue decline driven by declines in financial services … federal also major contributor – Rev
Slide 6: 3Q08 Revenue by Geography
Slide 4 3Q08 Revenue by Geography Customer Revenue: $1,312 Million Americas 11% 3Q08 % Customer Change Pacific Asia Revenue vs. 3Q07 12% United States 43% United States $560M -8% International $752M -4% Europe/Africa 34% Overall $1,312M -6%
Slide 7: 3Q08 Revenue by Business Segment
Slide 5 3Q08 Revenue by Business Segment Customer Revenue: $1,312 Million 3Q08 % Customer Change Revenue vs. 3Q07 Services $1,152M -5% Services 88% Technology 12% Technology $160M -9% Overall $1,312M -6%
Slide 8: 3Q08 Services Revenue
Slide 6 3Q08 Services Revenue Customer Revenue: $1,152 Million Core 3Q08 % Maint. Customer Change 8% Revenue vs. 3Q07 Outsourcing $515M -2% Infrastructure Systems Int./ Services 16% Consulting SI/Consulting $361M -5% 31% Infrastructure $182M -13% Services Outsourcing Core $94M -11% 45% Maintenance O
Slide 9: 3Q08 Technology Revenue
Slide 7 3Q08 Technology Revenue Customer Revenue: $160 Million 3Q08 % Customer Change Revenue vs. 3Q07 Enterprise $141M +6% Servers Enterprise Specialized Servers Technologies Specialized 88% 12% $19M -54% Technologies Overall $160M -9%
Slide 10: 3Q08 Profit Margins – By Segment
Slide 8 3Q08 Profit Margins – By Segment GAAP Non-GAAP * 3Q08 Y/Y bp 3Q08 Y/Y bp Gross Margin 22.2% 0 22.0% -140 Unisys Operating Margin 2.9% -20 2.9% -170 Gross Margin 17.6% -10 17.4% -160 Services Operating Margin 3.1% -50 2.8% -250 Gross Margin 47.5% +290 47.4% +270 Technology Operating Margin 11
Slide 11: Cash Flow Comparison
Slide 9 Cash Flow Comparison $M 3Q08 3Q07 Cash Flow From Operations $114 $7 Cash Restructuring Payments $6 $37 Capital Expenditures $78 $71 Free Cash Flow (Usage) $36 ($64) Depreciation & Amortization $98 $87 Cash Balance $494 $449
Slide 12: Business Environment
Slide 10 Business Environment • Expect current weak environment to continue in 4Q • Taking actions to reduce operating expenses, especially SG&A • Focused on driving cost-efficiencies and free cash flow
Slide 13: Unisys Near-Term Priorities
Slide 11 Unisys Near-Term Priorities • Four levels of activity: • Concentrate resources on fewer markets/offerings • Create clear, differentiated value proposition • Ensure highly utilized, cost-competitive labor pool • Simplify organization and significantly reduce expenses • Will be working on all
Slide 14: Questions & Answers
Questions & Answers Ed Coleman Janet Haugen Chairman & CEO Chief Financial Officer
Slide 15: Reconciliation of GAAP to Non-GAAP Financial Information
Reconciliation of GAAP to Non-GAAP Financial Information The following Schedules A and B present financial information with and without net cost-reduction charges and retirement-related expense. Retirement-related expense is defined as our defined benefit pension plan expense and our U.S. 401(k) Pla
Slide 16: Schedule A: Gross Profit & Margins Reconciliation
Schedule A 3Q08 vs. 3Q07 Gross Profit & Margins: GAAP to Non-GAAP Reconciliation $M 3Q08 3Q07 UNISYS Gross Profit – GAAP $292.0 22.2% $309.1 22.2% Retirement-related Expense (Income) (1) ($3.3) (0.2%) $16.8 1.2% Net Cost Reduction ($0.2) 0% $0.3 0% Gross Profit – Non-GAAP $288.5 22.0% $326.2 23.4% S
Slide 17: Schedule B: Operating Profit & Margins Reconciliation
Schedule B 3Q08 vs. 3Q07 Operating Profit & Margins: GAAP to Non-GAAP Reconciliation $M 3Q08 3Q07 UNISYS Operating Profit – GAAP $37.9 2.9% $43.6 3.1% Retirement-related Expense (Income) (1) ($3.7) (0.2%) $22.8 1.6% Net Cost Reduction $3.9 0.2% ($1.8) (0.1%) Operating Profit – Non-GAAP $38.1 2.9% $6
Slide 18: Schedule C: Net Cost-Reduction Expense (Income)
Schedule C P&L Detail: Net Cost-Reduction Expense (Income) $M 3Q08 3Q07 Cost of Revenue ($0.2) $0.3 SG&A $3.8 ($1.8) R&D $0.3 ($0.3) Total $3.9 ($1.8)
Slide 19: Schedule D: Retirement-Related Expense (Income) Detail
Schedule D Retirement-Related Expense (Income) Detail $M 1Q07 2Q07 3Q07 4Q07 FY07 1Q08 2Q08 3Q08 Pension $10.6 $11.4 $11.4 $1.6 $35.0 ($11.5) ($8.8) ($15.0) Expense/(Income) U.S. 401(k) Match $12.9 $13.1 $11.4 $10.0 $47.4 $12.1 $14.6 $11.3 Total Pre-Tax Retirement-Related $23.5 $24.5 $22.8 $11.6 $82
Slide 20: Schedule E: Retirement-Related Expense P&L Detail
Schedule E P&L Detail: Retirement-Related Expense (Income) $M 3Q08 3Q07 Cost of Revenue ($3.3) $16.8 SG&A $0.3 $5.1 R&D ($0.7) $0.9 Total ($3.7) $22.8
Slide 21: Schedule F: Segment Retirement-Related Expense Detail
Schedule F Segment Detail: Retirement-Related Expense (Income) $M 1Q07 2Q07 3Q07 4Q07 FY07 1Q08 2Q08 3Q08 Services $21.1 $22.1 $20.7 $10.3 $74.2 $1.2 $5.6 ($3.1) Technology $2.4 $2.4 $2.1 $1.3 $8.2 ($0.6) $0.2 ($0.6) Total $23.5 $24.5 $22.8 $11.6 $82.4 $0.6 $5.8 ($3.7)