Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — FY2011 Earnings Presentation
32 slides from Unisys Corporation New's earnings presentation, Jan 31, 2012
Slide 1: Fourth-Quarter & Full Year 2011 Financial Results
Fourth-Quarter & Full Year 2011 Financial Results January 31, 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
Ed Coleman Chairman & CEO ae —
Slide 4: Three Year Financial Goals - Continued Progress
Three Year Financial Goals - Continued Progress Three Year Goals Full Year 2011 2011 – 2013 Progress Revenue Growth • Grow IT outsourcing and system integration • ITO revenue, excluding U.S. Federal, grew 9% at market rates, adjusted for loss of TSA • SI revenue, excluding U.S. Federal, was flat rev
Slide 5: Unisys Differentiation
Unisys Differentiation Growth Opportunities Our Areas of Strength How We Compete Through Disruptive IT Trends Security • Differentiate with our expertise in delivering mission critical IT solutions and services. • Ongoing differentiation from the Data Center quality of our services and solutions. Tr
Slide 6: Market Leadership Position in End User Outsourcing
Information Technology Outsourcing: Market Leadership Position in End User Outsourcing “Unisys continues to be a Leader in the help desk Magic Quadrant for two main reasons. Firstly, it focuses on the day-to-day delivery of services to achieve high levels of customer satisfaction. And secondly, it i
Slide 7: View of 2012
View of 2012 • Enter 2012 a much stronger company • Confident in our strategy • Positioned to benefit from growth opportunities in the market • Focused on improving results in U.S. Federal business • Making key investments in 2012 to drive profitable growth • Focused on continuing progress toward th
Slide 8: Janet Haugen
Janet Haugen SVP & CFO ee
Slide 9: 4Q11 Services Order Highlights
4Q11 Services Order Highlights • Services orders grew y/y and sequentially – ITO orders more than doubled in 4Q11 – SI/consulting orders up high single digits in 4Q11 • By geography: – Orders grew in North America and Latin America • Within North America, both U.S. Federal and non-Federal orders gre
Slide 10: 4Q11 Financial Results
4Q11 Financial Results $M (excluding EPS) 4Q11 4Q10 Y/Y Ch Revenue $985 $1,045 (6%) Gross Profit $280 $311 (10%) Gross Profit Margin 28.4% 29.8% (1.4 pts) Operating Expenses (SG&A plus R&D) $159 $177 (10%) Operating Profit $122 $135 (10%) Operating Profit Margin 12.3% 12.9% (0.6 pts) Other Income (E
Slide 11: 4Q11 Revenue
4Q11 Revenue 4Q11 Revenue = $985M • Currency did not impact Y/Y comparison • Revenue down 6% – Decline in U.S. Federal revenue caused Technology 3 points of the decline 15% – Decline in low margin 3rd party technology sales • Excluding revenue from U.S. Federal – Overall revenue down 3% Services • D
Slide 12: 4Q11 Services Revenue by Portfolio
4Q11 Services Revenue by Portfolio Services Revenue $M 4Q11 Y/Y Ch 100% Services Revenue $835 (3%) 8% 8% BPO 7% 6% Gross Margin 20.0% (190 bp) 13% 15% Core Operating Margin 7.6% (40 bp) 75% ISS Revenue by Portfolio 4Q11 Y/Y Ch Systems Integration $288 (4%) 37% 37% ITO 50% Information Technology $311
Slide 13: 4Q11 Technology Revenue by Portfolio
4Q11 Technology Revenue by Portfolio Technology Revenue $M 4Q11 Y/Y Ch 100% 6% Other Technology Revenue $150 (19%) 18% Technology Gross Margin 65.9% +940 bp 75% Enterprise Class Operating Margin 37.7% +760 bp Software & Servers 50% Revenue by Portfolio 4Q11 Y/Y Ch 94% 82% Enterprise Class $141 (7%)
Slide 14: U.S. Federal Government Business
U.S. Federal Government Business Federal Revenue 2011 Business Mix $M TSA Revenue Revenue $300 Homeland Defense and Security $250 Intelligence 24% $224 29% $213 $206 $199 $200 $181 Civilian $157 $152 $162 47% $150 $100 Revenue Revenue Y/Y $50 Y/Y Excluding TSA $176 $182 $191 $177 4Q11 (18%) (8%) $30
Slide 15: 4Q11 Unisys Revenue Profile
4Q11 Unisys Revenue Profile Geography Latin U.S. Y/Y Ch America Federal Asia 12% 16% Pacific North America (4%) North 13% America Excluding U.S. Federal 9% 42% Europe/ Africa Europe/Africa (13%) 33% Asia Pacific 8% Latin America (3%) U.S. Industry Federal 16% Y/Y Ch Financial Public Sector (5%) 21%
Slide 16: 2011 Financial Results
2011 Financial Results $M (excluding EPS) 2011 2010 Y/Y % Ch Revenue $3,854 $4,020 (4%) Gross Profit $987 $1,072 (8%) Gross Profit Margin 25.6% 26.7% (110 bp) Operating Expenses (SG&A plus R&D) $662 $696 (5%) Operating Profit $325 $376 (14%) Operating Profit Margin 8.4% 9.3% (90 bp) Other Income (Ex
Slide 17: 2011 Revenue
2011 Revenue 2011 Revenue = $3.85B • Currency had a 3% positive Y/Y impact • Revenue down 4% – Decline attributable to lower U.S. Federal revenue Technology 13% • Excluding revenue from U.S. Federal – Overall revenue rose 1% – Services revenue up 3% • Growth in ITO and Infrastructure; SI was flat Se
Slide 18: 2011 Services Revenue by Portfolio
2011 Services Revenue by Portfolio Services Revenue $M 2011 Y/Y Ch 100% Services Revenue $3,355 (3%) 8% 8% BPO 7% 6% Gross Margin 20.0% (10 bp) 14% 14% Core Operating Margin 6.9% +20 bp 75% ISS Revenue by Portfolio 2011 Y/Y Ch Systems Integration $1,165 (5%) 36% 37% ITO 50% Information Technology $1
Slide 19: 2011 Technology Revenue by Portfolio
2011 Technology Revenue by Portfolio Technology Revenue $M 2011 Y/Y Ch 100% Other 11% Technology Revenue $499 (11%) 18% Technology 75% Gross Margin 56.9% +190 bp Enterprise Class Software & Operating Margin 21.5% +40 bp Servers 50% 89% Revenue by Portfolio 2011 Y/Y Ch 82% 25% Enterprise Class $444 (
Slide 20: 2011 Unisys Revenue Profile
2011 Unisys Revenue Profile Latin Y/Y Ch Geography America U.S. Federal Asia 12% 17% North America (9%) Pacific North 14% America Excluding U.S. Federal 3% 42% Europe/ Europe/Africa (2%) Africa 32% Asia Pacific 3% Latin America Flat U.S. Y/Y Ch Industry Federal 17% Financial Public Sector (8%) 22% P
Slide 21: Cash Flow Comparison
Cash Flow Comparison $M 4Q11 4Q10 2011 2010 Cash Flow From Operations $159 $187 $317 $337 Capital Expenditures $33 $41 $134 $203 Free Cash Flow * $126 $146 $183 $134 Depreciation & Amortization $45 $61 $195 $251 Adjusted EBITDA** $183 $187 $576 $569 * Free cash flow = Cash flow from operations less
Slide 22: 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 4Q11 PF** *Net Cash = Cash less LTD and utilization under AR securitization\revolver facility.
Slide 23: Balance Sheet & Capital Structure
Balance Sheet & Capital Structure • Three-year goal to reduce debt to ~$210M by December 31, 2013 – Reduced debt by $464M in 2011 – Today announced further reduction of $65.5M • Calling all $25.5M of 14.25% notes due September 2015 and $40.0M of 12.5% notes due January 2016 • After redemption, total
Slide 24: Update on Pension Plan and Cash Requirements
Update on Pension Plan and Cash Requirements Cash Funding Requirements ($M) 2011 2012E U.S. Qualified Defined Benefit Pension Plan $0 $140 Other Plans $83 $100 Total $83 $240 Worldwide P&L Impact ($M) Total Pension Expense $34 $102 U.S. Qualified Defined Benefit Pension Plan Expected Return on Asset
Slide 25: Questions & Answers
Questions & Answers
Slide 26: 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 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Pretax Income and Non-GAAP Earnings Per Diluted Share – As a result of the debt reductions, Unisys recorded pretax charges of $7.6 million and $85.2 million, respectively, during the fourth quarter and full year of 2011, and $0.7 million and $2.1 million, respect
Slide 28: EBITDA and Adjusted EBITDA
Schedule A: GAAP to Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Earnings before Interest, Taxes, Depreciation and Amortization $M 4Q11 4Q10 2011 2010 Net Income from Continuing Ops $94.3 $95.2 $120.5 $158.9 available to Common Shareholders Preferred Stock Dividends 4.0 -- 13.5 -- Net Income f
Slide 29: Non-GAAP Earnings per Diluted Share
Schedule B: GAAP to Non-GAAP Reconciliation Non-GAAP Earnings per Diluted Share $M except share and per share data 4Q11 4Q10 2011 2010 GAAP net income from continuing ops attributable $94.3 $95.2 $120.5 $158.9 to Unisys Corporation common shareholders Debt reduction charge, net of tax 7.6 0.7 85.2 2
Slide 30: Free Cash Flow
Schedule C: GAAP to Non-GAAP Reconciliation Free Cash Flow $M 4Q11 4Q10 2011 2010 Cash Provided by Operations $159.5 $186.8 $317.2 $336.8 Capital Expenditures (33.3) (41.2) (134.4) (203.1) Free Cash Flow $126.2 $145.6 $182.8 $133.7 © 2012 Unisys Corporation. All rights reserved. 30
Slide 31: Net Cash (Debt)
Schedule D: GAAP to Non-GAAP Reconciliation Net Cash (Debt) 4Q11 $M 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 PF* Long-Term Debt (Including 1,060.6 1,060.3 1,061.2 911.0 911.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.4 Current Maturities) AR Securitization / 141.0 1
Slide 32: Thank You
Thank You www.unisys.com/investor © 2012 Unisys Corporation. All rights reserved. 32