Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q2 2012 Earnings Presentation
27 slides from Unisys Corporation New's earnings presentation, Jul 24, 2012
Slide 1: Second-Quarter 2012 Financial Results
Second-Quarter 2012 Financial Results July 24, 2012 www.unisys.com/investor Ed Coleman Janet Haugen Chairman & CEO Chief Financial 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 assumption
Slide 3: Ed Coleman, Chairman & CEO
Ed Coleman Chairman & CEO ae —
Slide 4: 2Q12 Highlights
2Q12 Highlights Profitability • Net income of $46.6M in 2Q12 vs. a net loss of $11.6 in the prior year • Diluted EPS of $0.99 vs. a diluted loss per share of $0.27 in 2Q11 • Non-GAAP EPS of $1.41 vs. non-GAAP EPS of $1.07 a year ago* Revenue • Revenue down 2%; 3% growth on constant currency basis •
Slide 5: Three Year Financial Goals - Continued Progress
Three Year Financial Goals - Continued Progress Maintaining focus on operational efficiency while growing profitable revenue Three Year Goals 2Q12 2011 – 2013 Progress Pre-tax Profit • Increase annual pre-tax profit to • 2Q12 pre-tax profit of $75M; $97M before pension $350M in 2013, excluding any e
Slide 6: Reducing Leverage
Reducing Leverage $M Long-Term Debt (LTD) AR Securitization\Revolver Cash Net Cash* $1,500 $1,250 $1,000 $750 $500 $250 $0 -$250 -$500 -$750 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 2Q12 PF** *Net Cash = Cash less LTD and utilization under AR securitization\revolver
Slide 7: Positioning Unisys for Profitable Growth
Positioning Unisys for Profitable Growth • Differentiate through services and solutions that help our clients operate more safely and securely in an ever more connected world • Help clients address disruptive trends such as mobility, cloud computing, and cybersecurity • Believe we are positioned to
Slide 8: Janet Haugen, SVP & CFO
Janet Haugen SVP & CFO ee
Slide 9: 2Q12 Financial Results
2Q12 Financial Results $M (excluding EPS) 2Q12 2Q11 Y/Y Ch Revenue $921 $937 (2%) Gross Profit $243 $214 14% Gross Profit Margin 26.4% 22.8% 3.6 pts Operating Expenses (SG&A plus R&D) $164 $166 (1%) Operating Profit $79 $48 64% Operating Profit Margin 8.6% 5.1% 3.5 pts Interest Expense $8 $13 Other
Slide 10: Operating Profit
Operating Profit % of $M Trailing Twelve Months Operating Profit Revenue $500 25.0% $411 $400 $373 $375 $376 $378 20.0% $359 $347 $330 $338 $325 $301 $300 15.0% $200 10.0% $140 9.6% 9.3% 9.8% 8.6% 9.1% 9.1% 8.6% 9.0% 7.8% 8.4% 7.5% $100 5.0% $52 -$3 3.2% $0 1.1% 0.0% -0.1% -$100 -5.0% 1Q09 2Q09 3Q09
Slide 11: 2Q12 Segment Revenue
2Q12 Segment Revenue • Services revenue down 3% Y/Y – Services revenue up 1% in constant currency – Excluding U.S. Federal, Services revenue flat; up 5% in constant currency • Technology revenue up 12% Y/Y 2Q12 Revenue = $921M 2Q11 Revenue = $937M Technology Technology 11% 10% Services 89% Services
Slide 12: 2Q12 Services Revenue by Portfolio
2Q12 Services Revenue by Portfolio Services Revenue $M 2Q12 Y/Y Ch 100% Services Revenue $816 (3%) 8% 7% BPO 6% 7% Gross Margin 21.0% 90 bp 13% 15% Core Operating Margin 8.0% 90 bp 75% ISS Revenue by Portfolio 2Q12 Y/Y Ch Systems Integration $264 (8%) 41% 37% ITO 50% Information Technology $330 8% S
Slide 13: 2Q12 Technology Revenue by Portfolio
2Q12 Technology Revenue by Portfolio Technology Revenue $M 2Q12 Y/Y Ch 100% 5% Other Technology Revenue $105 12% 16% Technology Gross Margin 63.4% 1440 bp 75% Enterprise Class Operating Margin 28.6% 2620 bp Software & Servers 50% 95% Revenue by Portfolio 2Q12 Y/Y Ch 84% Enterprise Class $100 27% 25%
Slide 14: U.S. Federal Government Business
U.S. Federal Government Business $M Federal Revenue 2Q12 Business Mix $300 $250 Defense & Homeland Intelligence Security 26% 23% $200 $181 $162 $157 $152 $150 Civilian $125 $121 51% $100 $50 Revenue Y/Y 2Q12 (20%) $0 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 © 2012 Unisys Corporation. All rights reserved. 14
Slide 15: 2Q12 Unisys Revenue Profile
2Q12 Unisys Revenue Profile Latin Geography America U.S. Y/Y Ch Federal Asia 10% 13% Pacific North North America 1% 17% Excluding U.S. Federal 15% America 41% Europe/ Africa Europe/Africa (5%) 32% Asia Pacific 19% Latin America (25%) U.S. Industry Federal 13% Y/Y Ch Financial 23% Public Sector (10%)
Slide 16: 2Q12 Services Order Highlights
2Q12 Services Order Highlights • Services orders declined by double digits Y/Y • Services orders by geography: – Orders grew in Asia Pacific and Latin America – Orders declined in North America and Europe • Closed 2Q12 with $5.1B in services backlog vs. $5.7B at 2Q11 – $670M of services backlog expe
Slide 17: Cash Flow Comparison
Cash Flow Comparison $M 2Q12 2Q11 Cash Flow From Operations $57 $36 Capital Expenditures $35 $29 Free Cash Flow* $22 $7 Pension Funding $51 $21 Free Cash Flow Before Pension Funding* $73 $27 Depreciation & Amortization $47 $50 Cash Balance $660 $625 *See Schedule D: GAAP to non-GAAP Reconciliation ©
Slide 18: Balance Sheet & Capital Structure
Balance Sheet & Capital Structure • Three-year goal to reduce debt to ~$210M by Dec. 31, 2013 – Retired $68.5M of debt in first half 2012 – Today announced redemption of $84.5M in 12.5% notes due January 2016 • After completion of redemption announced today: – Total debt will be reduced to $208M – 1
Slide 19: Defined Benefit Plans Cash Funding Estimates
Defined Benefit Plans Cash Funding Estimates Estimates Cash Funding Requirements ($M) 2011 2012 2013 2014 2015 2016 2017 U.S. Qualified Defined Benefit Pension Plan $0 $143 $155 $130 $110 $85 $65 Previous Other Defined Benefit Pension Plans $83 $97 $115 $95 $80 $80 $80 Estimates Total $83 $240 $270
Slide 20: Questions & Answers
Questions & Answers
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company also discusses, in its earnings press release and/or earnings presentation materials, the following
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Earnings Per Diluted Share – As a result of debt reductions, Unisys recorded charges, net of tax, of $0.3 million and $45.7 million, respectively, during the second quarters of 2012 and 2011, respectively. The company also recorded pension expense, net of tax, of
Slide 23: Schedule A: Non-GAAP Earnings (Loss) per Diluted Share
Schedule A: GAAP to Non-GAAP Reconciliation Non-GAAP Earnings (Loss) per Diluted Share $M except share and per share data 2Q12 2Q11 GAAP net income (loss) attributable to Unisys Corporation common shareholders $46.6 ($11.6) Debt reduction charge, net of tax 0.3 45.7 Brazilian non-income tax case, ne
Slide 24: Schedule B: Net Cash (Debt)
Schedule B: GAAP to Non-GAAP Reconciliation Net Cash (Debt) 2Q12 $M 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 PF* Long-Term Debt (Including 1,060.6 1,060.3 1,061.2 911.0 911.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 208.3 Current Maturities) AR Se
Slide 25: Schedule C: EBITDA and Adjusted EBITDA
Schedule C: GAAP to Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Earnings before Interest, Taxes, Depreciation and Amortization $M 2Q12 2Q11 Net Income (Loss) Attributable to Unisys $50.7 ($7.6) Interest Expense 7.9 13.3 Income Tax Provision (Benefit) 22.1 (9.2) Depreciation & Amortization 46.
Slide 26: Schedule D: Free Cash Flow
Schedule D: GAAP to Non-GAAP Reconciliation Free Cash Flow $M 2Q12 2Q11 Cash Provided by Operations $57.1 $35.5 Capital Expenditures (34.8) (28.9) Free Cash Flow $22.3 $6.6 Pension Funding 50.6 20.6 Free Cash Flow Before Pension Funding $72.9 $27.2 © 2012 Unisys Corporation. All rights reserved. 26
Slide 27: Thank You
Thank You www.unisys.com/investor © 2012 Unisys Corporation. All rights reserved. 27