Avaya — JPMorgan 31st Annual Technology & Telecom Conference (May 2003)
18 slides from Avaya's conference presentation, May 8, 2003
Slide 1: JPMorgan 31st Annual Technology & Telecom Conference
JPMorgan 31st Annual Technology & Telecom Conference Garry K. McGuire Chief Financial Officer and SVP, Operations May 8, 2003 Copyright© 2003 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: Key Priorities
Key Priorities • Cash • Earnings • Growth Copyright© 2003 Avaya Inc. All rights reserved 3
Slide 4: Key Priorities and Results (As of Q2 FY03): Cash
Key Priorities and Results (As of Q2 FY03) Cash • Cash increased sequentially by $73M to $724M primarily as result of improvements in working capital management • Generated positive Cash Flow from Operations of $85M (net of $20M in business restructuring and related payments) • Improved liquidity: $
Slide 5: Key Priorities and Results (As of Q2 FY03): Earnings
Key Priorities and Results (As of Q2 FY03) Earnings • On track to lower our breakeven level (pre-tax net income) to $1,067M in revenues by the end of Q3 FY03, on an ongoing (non-GAAP) basis* • Improved Gross Margin to 42.2% in Q2 FY03 from 39.7% in Q1 FY03, the highest level since Q3 FY01 • Generate
Slide 6: Key Priorities and Results (As of Q2 FY03): Growth
Key Priorities and Results (As of Q2 FY03) Growth • Total revenue rose sequentially in Q2 FY03, the first increase in 8 quarters – Revenue for core business rose to $950M in Q2 FY03 from $946M in Q1 FY03 – CSAG revenue rose sequentially as result of higher sales in U.S. – Services revenue stabilized
Slide 7: Q2 FY03 Cash Flows
Q2 FY03 Cash Flows ($ in Millions) Cash Balance as of 12/31/02 651 Cash Flow from Operations (excl. BRR) 105 Business Restructuring Reserve and related expenses (20) Capital Expenditures (11) Other Investing Activities (2) Financing Activities 2 FX Impact on Cash (1) Cash Balance as of 3/31/03 724 C
Slide 8: BRR Reserves and Cash Usage
BRR Reserves and Cash Usage BRR Balance as of Q1 FY03 $129M - Usage for Employee Separations (10)M - Usage for Lease Obligations (8)M - Reversal to Income (non-cash) * (17)M BRR Balance as of Q2 FY03 $94M * Attributed $15M to employee separations and $2M to leases Actual Actual Proj Proj Q1 Q2 Q3-Q4
Slide 9: Avaya: Strategically Positioned to Succeed
Avaya: Strategically Positioned to Succeed • An unmatched communications product, solutions and services portfolio – Built on customer choice – Offering demonstrated ROI – Leveraging our voice expertise • A culture and structure focused on performance – Centered on key market segments – Greater acco
Slide 10: IP Telephony
IP Telephony ECLIPS Avaya MultiVantage Software Delivering World-Class Reliability, Security, Manageability, and Scalability Stand Alone & Integrated Modular & Stackable Media Servers Media Gateways IP & Digital Telephones VPN IP Office IP Soft Phone & IP Agent MultiService Networking Competitive Ad
Slide 11: IP Telephony
IP Telephony Enterprise Benefits: Avaya Offers: Reduced operating costs • Migration choices ensuring customer ROI and investment protection Simplified network • Flexibility, modularity, standards-based management • Reliability, security, feature-richness Productivity • Applications that thrive on co
Slide 12: Contact Centers
Multimedia Contact Center Contact Centers • Anytime, Anywhere, Any Way Communications • Enabling the Virtual Enterprise • Lowering total cost of Proactive Self- ownership Contact Service MultiVantageTM Self-Service Operational Multimedia Call Center Excellence Contact • Enhancing voice self-service
Slide 13: Unified Communication
Unified Communication Wherever You Are … Seamless Access and Delivery Via Speech, Web, Wireless … Personal Efficiency Message At Home 12% Or Management Management Remote Office 13% Collaboration Contact Management Information Integrated w/ Management Enterprise Applications At Work: 65% Integrates M
Slide 14: Services
Services Plan Design Life cycle services for enterprises Security Convergence Practice Solutions • Multi-vendor Network Network • Multi-technology Maintenance Consulting Management Solutions Solutions Solutions • Multi-channel Outsourcing Integration and Solutions Implementation Full-function organi
Slide 15: Competitive Positioning
Competitive Positioning (Most Recent Results Through Calendar 2002) Position Position Position Position Position WW Enterprise Telephony * [1] #4 #2 NA #1 #3 WW IP Telephony [2] #6 #2 #1 #3 #8 US Enterprise Telephony [3] #18 #1 #7 #2 #5 US Traditional PBX [3] NA #1 NA #2 #3 US IP Telephony [3] #6 #2
Slide 16: Competitive Advantages
Competitive Advantages • Clear focus on the enterprise • Significant installed customer base • Choice of migration paths to next-generation communications technologies • Comprehensive services organization providing multi-vendor support and capabilities – a key strategic differentiator • Commitment
Slide 17: Our Commitment
Our Commitment • We will stay close to our markets in order to leverage and capitalize on the potential of our large, diverse installed customer base • We have the products and the people to successfully compete, and even in the current environment there is evidence that we are capturing market shar
Slide 18: JPMorgan 31st Annual Technology & Telecom Conference
JPMorgan 31st Annual Technology & Telecom Conference Garry K. McGuire Chief Financial Officer and SVP, Operations May 8, 2003 Copyright© 2003 Avaya Inc. All rights reserved
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