Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Q3 2023 Earnings Presentation
22 slides from Unisys Corporation New's earnings presentation, Nov 7, 2023
Slide 1: Third Quarter 2023 Financial Results
Third Quarter Peter Altabef Chair and CEO 2023 Financial Results Deb McCann CFO NOV 6, 2023
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Unisys ca
Slide 3: Performance Highlights 3Q 2023
Performance Highlights 3Q 2023 Revenue Profitability & Free Cash Flow Ex-L&S Revenue +6.2%, or +4.1% in constant currency Adj. EBITDA of $37.0M; Adj. EBITDA margin of 8.0% CA&I and DWS growth driven by expansion and new scope with Non-GAAP operating profit of +$0.4M; Non-GAAP operating margin of exi
Slide 4: Unisys Logistics Optimization
Unisys Logistics Optimization TM 01 Pre-trained data models Optimize logistics management processes An advanced analytics solution that 02 Built-in machine learning Optimizes models with no data training required uses quantum annealing to compile multiple disparate data sources to optimize space, fr
Slide 5: Connect your most important dots
Connect your most important dots Capacity Predict and prescribe optimal pallet & unit load device builds, allowing for day-of-departure changes to maximize and unused cargo space Optimizing the whole supply Inventory chain to increase revenue, Optimize inventory levels & location, freight sensitivit
Slide 6: 3Q Revenue
3Q Revenue ($M) COMPANY DWS CA&I ECS +0.7% YoY (1.4%) cc YoY +6.2% YoY Up 6.2% in CC, or up 8.3% as Up 8.7% in CC, or 9.2% as Down 14.2% in CC, or 11.3% as reported reported reported +4.1% cc YoY $461 $465 $374 $398 $130 $141 $122 $134 $138 $122 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 1 To
Slide 7: 3Q Gross Margins
3Q Gross Margins COMPANY DWS CA&I ECS (210 bps) YoY 30 bps contraction 970 bps expansion 850 bps contraction +230 bps YoY 22.6% 20.5% 58.7% 50.2% 11.7% 14.0% 15.1% 14.8% 15.3% 5.6% 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 1 Total Company Ex-L&S Contraction due to lower L&S Contraction drive
Slide 8: 3Q Profitability & Free Cash Flow
3Q Profitability & Free Cash Flow ($M) OPERATING PROFIT & EARNINGS PER SHARE, FREE CASH FLOW ADJ. EBITDA & MARGIN MARGIN (Non-GAAP)1 DILUTED (Non-GAAP)1 (Non-GAAP)1 3.1% 11.4% 8.0% 0.1% $14 $53 $37 $0.05 $0.40 $24 ($26) ($0.33) 2022 2023 2022 2023 2022 2023 2022 2023 Declines driven by lower License
Slide 9: 3Q23 EBITDA and Cash Flow Detail
3Q23 EBITDA and Cash Flow Detail $M 3Q23 3Q22 EBITDA 1 $ 7.6 $ 4.2 ADJUSTED EBITDA 1 $ 37.0 $ 52.5 ADJUSTED EBITDA MARGIN 1 8.0% 11.4% OPERATING CASH FLOW ($ 4.1) $ 44.5 CAPITAL EXPENDITURES ($ 21.6) ($ 20.7) FREE CASH FLOW 1 ($ 25.7) $ 23.8 PRE-PENSION FREE CASH FLOW 1 ($ 15.5) $ 32.6 ADJUSTED FREE
Slide 10: Leverage Detail
Leverage Detail $M SEPTEMBER 30, 2023 SENIOR SECURED NOTES 1 $ 485.0 FINANCE LEASES AND OTHER DEBT 19.6 TOTAL DEBT $ 504.6 GLOBAL NET PENSION DEFICIT (AS OF DEC 31, 2022) 543.1 TOTAL DEBT INCLUDING PENSION DEFICIT $ 1,047.7 CASH $ 385.0 NET LEVERAGE $ 119.6 NET LEVERAGE INCLUDING PENSION DEFICIT $ 6
Slide 11: Raising Financial Guidance
REVISED PRIOR Revenue Growth 0% to 1.5% (7%) to (3%) in constant currency Assumes Ex-L&S growth of 3% to Assumed Ex-L&S growth of (1%) to 4.5% & ~$420M L&S revenue +4% & ~$350 L&S revenue Raising Financial Non-GAAP Operating Margin* 5% to 6% 2% to 4% Guidance Full-Year 2023 Adjusted EBITDA Margin* 1
Slide 12: Appendix
Appendix UW unisys
Slide 13: Unisys Segment and Solutions Map
Unisys Segment and Solutions Map SEGMENT / REPORTING DESCRIPTION NEXT-GEN SOLUTIONS TRADITIONAL SOLUTIONS Modern Workplace: hybrid virtual desktop; Digital Workplace We deploy, integrate, and manage enterprise Traditional Workplace: field services, device-as-a-service; next-gen service desk; Solutio
Slide 14: 3Q Revenue Profile
3Q Revenue 15% 12% Profile 30% 13% SEGMENT GEOGRAPHY 48% 26% 14% 27% 29% US & Canada EMEA DWS CA&I ECS All Other Asia Pacific Latin America Ex-L&S MIX OF TOTAL COMPANY 24% 37% 34% 86% CLIENT REVENUE SECTOR TYPE Ex-L&S Solutions L&S Solutions 29% 76% Commercial Recurring Non-Recurring Financial Servi
Slide 15: Excluding License and Support (Ex-L&S)
Excluding License and Support (Ex-L&S) $M 3Q23 3Q22 GAAP REVENUE $ 464.6 $ 461.2 L&S REVENUE 67.1 86.9 EX-L&S REVENUE (NON-GAAP) $ 397.5 $ 374.3 GAAP GROSS PROFIT $ 95.3 $104.3 L&S GROSS PROFIT 39.6 60.5 EX-L&S GROSS PROFIT (NON-GAAP) $ 55.7 $ 43.8 GAAP GROSS MARGIN 20.5% 22.6% AS A % OF REVENUE EX-
Slide 16: Non-GAAP Operating Profit
Non-GAAP Operating Profit $M 3Q23 3Q22 GAAP OPERATING INCOME ($ 17.1) ($ 8.0) COST REDUCTION AND OTHER EXPENSES 1 17.1 21.6 POSTRETIREMENT EXPENSE 2 0.4 0.5 NON-GAAP OPERATING PROFIT $ 0.4 $ 14.1 REVENUE $ 464.6 $ 461.2 GAAP OPERATING PROFIT MARGIN (3.7%) (1.7%) NON-GAAP OPERATING PROFIT MARGIN 0.1%
Slide 17: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $M 3Q23 3Q22 NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 50.0) ($ 40.1) NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1.1 0.2 INTEREST EXPENSE, NET OF INTEREST INCOME OF $ 6.9 AND $2.9 RESPECTIVELY 1 0.9 5.0 PROVISION FOR INCOME TAX 20.4 0.7 DEPRECIATION 19.6 22.
Slide 18: Non-GAAP Diluted Earnings Per Share
Non-GAAP Diluted Earnings Per Share $M EXCEPT SHARE AND PER SHARE DATA 3Q23 3Q22 GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION ($ 50.0) ($ 40.1) POST-RETIREMENT EXPENSE: PRETAX 10.3 11.4 TAX (0.2) 0.2 NET OF TAX $ 10.5 $ 11.2 COST REDUCTION AND OTHER EXPENSE: PRETAX 17.6 32.0 TAX 0.4 --
Slide 19: Adjusted Free Cash Flow
Adjusted Free Cash Flow $M 3Q23 3Q22 CASH PROVIDED BY (USED FOR) OPERATIONS ($ 4.1) $ 44.5 ADDITIONS TO MARKETABLE SOFTWARE (11.6) (11.6) ADDITIONS TO PROPERTIES (3.5) (7.5) ADDITIONS TO OUTSOURCING ASSETS (6.5) (1.6) FREE CASH FLOW ($ 25.7) $ 23.8 POSTRETIREMENT FUNDING 10.2 8.8 PRE-PENSION FREE CA
Slide 20: Non-GAAP Net Income Margin
Non-GAAP Net Income Margin $M 3Q23 3Q22 REVENUE $ 464.6 461.2 NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 50.0) ($ 40.1) NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 22.3) $ 3.1 NET INCOME (LOSS) (10.8%) (8.7%) AS A % OF REVENUE NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS (4.8%) 0.7% A
Slide 21: Definitions of Non-GAAP Financial Metrics
Definitions of Non-GAAP Financial Metrics Non-GAAP operating profit – This measure excludes pretax postretirement expense and pretax charges in connection with cost-reduction activities and other expenses. EBITDA & adjusted EBITDA – Earnings before interest, taxes, depreciation and amortization (EBI
Slide 22: Definitions of Other Metrics and Terms
Definitions of Other Metrics and Terms Constant currency – A significant amount of the company’s revenue is derived from international operations. As a result, the company’s revenue has been and will continue to be affected by changes in the U.S. dollar against major international currencies. The co
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