Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Conference Presentation (January 2019)
31 slides from Unisys Corporation New's conference presentation, Jan 9, 2019
Slide 1: Company Presentation
Company Presentation January 9, 2019 Inder Singh | SVP & CFO 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 assumption
Slide 3: Business Overview
Business Overview
Slide 4: YTD 2018 Unisys Revenue Profile
YTD 2018 Unisys Revenue Profile Highlights Percent of Full Year 2017 Revenue: 2017 Revenue of $2,742M • Technology revenue mostly from software; attached and related services included in Services revenue • Over 50% of total revenue is international • 45% of revenue is from governments around the wor
Slide 5: Delivering on Our Vision and Mission
Delivering on Our Vision and Mission Unisys Vision: Enhancing people’s lives through secure, reliable, advanced technology. Unisys Mission Government Commercial Financial Services • Justice, Law Enforcement • Travel and Transportation • Commercial and Retail and Border Security • Life Sciences and H
Slide 6: Improved Overall Financial Performance
Improved Overall Financial Performance Total Company Revenue Non-GAAP Operating Profit Margin Adjusted EBITDA Margin 14.6% 14.9% 3% 13.6% 13.7% 11.5% -2% 8.75% -3% 8.5% 7.7% 7.75% 5.8% -6% -10% 1 1 2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018 1 1: 2018 numbers represent full-year guid
Slide 7: Strategic Perspectives
Strategic Perspectives
Slide 8: Progress on Key Strategic Initiatives
Progress on Key Strategic Initiatives Use Industry Leverage our Improve Profitability Go-To-Market Security Expertise Strategy to Improve to Drive Differentiation Revenue Trends • Total company YTD GAAP revenue grew • Stealth™ progress with • Non-GAAP operating profit margin improved 3.4% YoY; 3Q18
Slide 9: Strategy in Action: Recent Wins
Strategy in Action: Recent Wins Scalable and Repeatable U.S. Navy U.S. Transportation Security Monmouthshire Administration (TSA) Building Society U.S. Army Kansas Department of Administration Virginia Hawaii Information Department Technology of Human Agency Services Australian Georgia Department Te
Slide 10: Services Backlog Trend
Services Backlog Trend Four Consecutive Quarters of YoY Growth +33% YoY $4.8B $4.7B $4.6B $4.9B $4.3B $4.3B $3.9B $3.7B Historical Backlog: ANNUAL VIEW Recent Backlog: QUARTERLY VIEW 2014 2015 2016 3Q17 4Q17 1Q18 2Q18 3Q18 © 2018 Unisys Corporation. All rights reserved. | 10
Slide 11: Improving Trends While Strengthening Balance Sheet
Improving Trends While Strengthening Balance Sheet • Raised $440M of senior secured debt in April 2017 to further strengthen balance sheet • Year-end cash balance nearly doubled in 2017 to $734M • Required cash contributions to pension reduced by $350M over coming 10 years relative to prior estimate
Slide 12: Thank You
Thank You Question and Answer
Slide 13: Appendix
Appendix
Slide 14: Unisys Solutions
Unisys Solutions SECURE DIGITAL TRANSFORMATION Government Commercial Financial Services Justice, Law Enforcement and Border Security Travel and Transportation Commercial and Retail Banking Social Services | Homeland Security Life Sciences and Healthcare Mortgage Defense and Intelligence | Civilian A
Slide 15: Progress on Key Strategic Initiatives in 3Q18
Progress on Key Strategic Initiatives in 3Q18 Use Industry Go-To- Improve Consistency in Leverage our Security Improve Profitability Market Strategy to Annual Technology Expertise to Drive Improve Revenue Revenue Revenue Trends • Total company revenue grew 3.3% • Technology revenue of $83M, • Stealt
Slide 16: Go-To-Market Progress
Go-To-Market Progress Total Contract Value2 Total Company New Business $3.3B 3Q18 Pipeline1 912 $1.6B 500 624 $1.7B Total Company 215 $675M >$14B 3Q17 3Q18 YTD17 YTD18 3Q17 3Q18 YTD17 YTD18 16% YoY growth Annual Contract Value2 New Business Total Company New Business >$12B $1.1B 28% YoY growth 400 1
Slide 17: 3Q18 Financial Results
3Q18 Financial Results Revenue ($M) Operating Profit Net Income/Loss Attributable Diluted Earnings GAAP Margin (%) to Unisys ($M) per Share GAAP and Non-GAAP (GAAP) and GAAP and Non-GAAP $688 Adjusted EBITDA ($M) $666 (Non-GAAP) Non-GAAP GAAP Non-GAAP $96 Non-GAAP 8.1% $90 3Q17 3Q18 7.5% Non- Adjust
Slide 18: 3Q18 Revenue Growth by Region and Sector
3Q18 Revenue Growth by Region and Sector By Region By Sector Total U.S. & Asia Latin Total U.S. Company Canada EMEA Pacific America Company Commercial Financial Public Federal 42% 37% 12% 13% 20% 18% 6% 3% 1% 1% 6% 3% 1% 1% (25)% (2)% (4)% (5)% (5)% 3Q18 YoY (37)% 3Q18 YoY Constant Currency Constant
Slide 19: 3Q18 Segment Results
3Q18 Segment Results $M As Reported Non-GAAP Adjusted Services Segment 3Q17 3Q18 YoY Δ 3Q17 3Q18 YoY Δ • Services revenue growth of 5.2% (4.7% on a non-GAAP adjusted basis), marking the second Services Revenue $576 $606 5.2% $576 $603 4.7% consecutive quarter of Services growth Services Gross Profit
Slide 20: 3Q18 Cash Flow and EBITDA Results
3Q18 Cash Flow and EBITDA Results $M 3Q17 3Q18 Operating Cash Flow $54 $(16) Capital Expenditures $(47) $(48) Free Cash Flow $7 $(63) Adjusted Free Cash Flow $70 $(6) YoY Change EBITDA $12 $76 EBITDA Margin 1.7% 11.0% 930 bps Adjusted EBITDA $90 $96 Adjusted EBITDA Margin 13.5% 14.0% 50 bps See appe
Slide 21: Estimated Future Pension Cash Contributions Through 2027
Estimated Future Pension Cash Contributions Through 2027 $M U.S. Qualified Defined Benefit Plans All Other Plans $254 $252 $226 $48 $51 $195 $51 $192 $48 $51 $138 $130 $125 $125 $49 $48 $206 $201 $84 $51 $175 $147 $141 $81 $77 $74 $54 $51 $51 2017A 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 T
Slide 22: Potential Economic Benefit of Unisys Tax Assets
Potential Economic Benefit of Unisys Tax Assets $M Future Available Unisys Net Deferred Description Reductions in Tax Assets1 Taxable Income U.S. Net Operating Loss – Federal & State $570 $1,519 NOLs and Tax Credits Tax Credits 155 738 Pension 382 1,511 Pension and Other Other Deferred Tax Assets 68
Slide 23: 3Q18 Unisys Non-GAAP Adjusted Revenue Profile
3Q18 Unisys Non-GAAP Adjusted Revenue Profile Percent of Third Quarter 2018 Non-GAAP Adjusted Revenue © 2018 Unisys Corporation. All rights reserved. | 23
Slide 24: Impact of Convertible Notes on Earnings Per Share (EPS)
Impact of Convertible Notes on Earnings Per Share (EPS) (Illustrative Example) Illustrative Example Three Months Ended, • Under generally accepted accounting principles 20XX Only dilutive (GAAP) the dilutive effect of the Convertible ($M, except per share data) with quarterly Senior Notes (notes) on
Slide 25: Non-GAAP and Other Information
Non-GAAP and Other Information Although appropriate under generally accepted accounting principles (“GAAP”), the company’s results reflect items that the company believes are not indicative of its ongoing operations and that can make its profitability and liquidity results difficult to compare to pr
Slide 26: Non-GAAP and Other Information
Non-GAAP and Other Information Non-GAAP adjusted Services gross profit margin – During 2018, the company included adjustments discussed in “Non-GAAP adjusted revenue”. Non-GAAP adjusted Services operating profit margin – During 2018, the company included adjustments discussed in “Non-GAAP adjusted r
Slide 27: Revenue and Operating Profit
Schedule A: GAAP to Non-GAAP Reconciliation Revenue and Operating Profit $M 3Q17 3Q18 Reported revenue $666.3 $688.3 Restructuring reimbursement 0.0 (3.1) Non-GAAP adjusted revenue $666.3 $685.2 Operating profit (loss) $(2.9) $55.8 Postretirement expense 1.2 1.0 Cost reduction and other expense 51.7
Slide 28: EBITDA and Adjusted EBITDA
Schedule B: GAAP to Non-GAAP Reconciliation EBITDA and Adjusted EBITDA $M 3Q17 3Q18 Net income (loss) attributable to Unisys Corporation common shareholders $(41.1) $6.1 Net income (loss) attributable to noncontrolling interests (11.8) 0.9 Interest expense, net of interest income of $2.7, $2.5 respe
Slide 29: Earnings Per Diluted Share
Schedule C: GAAP to Non-GAAP Reconciliation Earnings Per Diluted Share $M except share and per share data 3Q17 3Q18 Net income (loss) attributable to Unisys Corporation common shareholders $(41.1) $6.1 Post-retirement expense: pretax 25.3 19.7 tax 0.1 (0.3) net of tax 25.2 20.0 Cost reduction and ot
Slide 30: Free Cash Flow
Schedule D: GAAP to Non-GAAP Reconciliation Free Cash Flow $M 3Q17 3Q18 Cash used for operations $53.9 $(15.5) Capital expenditures (46.9) (47.7) Free cash flow $7.0 $(63.2) Postretirement funding 43.0 51.6 Cost reduction and other payments, net of reimbursements 20.2 5.2 Adjusted free cash flow $70
Slide 31: Reconciliation of Segment Reporting
Schedule E: GAAP to Non-GAAP Reconciliation Reconciliation of Segment Reporting $M 3Q17 3Q18 Services Reported Revenue $575.5 $605.6 Restructuring reimbursement 0.0 (3.1) Services non-GAAP adjusted Revenue $575.5 $602.5 Services gross profit $95.0 $96.1 Restructuring reimbursement 0.0 (3.1) Non-GAAP