Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Q4 2023 Earnings Presentation
32 slides from Unisys Corporation New's earnings presentation, Feb 21, 2024
Slide 1: Fourth Quarter & Full-Year 2023 Financial Results
Fourth Quarter & Full-Year Peter Altabef Chair and CEO 2023 Financial Results Deb McCann CFO FEB 21, 2024
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: FY23 Performance Highlights
FY23 Performance Exceeded original and upwardly-revised Highlights Exceeded Guidance guidance ranges for both revenue growth and profitability $2,015M $1,586M Improved Grew Ex-L&S revenue +4.9% as reported REVENUE and in constant currency and expanded EX - L&S REVENUE Ex-L&S Results Ex-L&S gross mar
Slide 4: 4Q23 Performance Highlights
4Q23 Performance Highlights Revenue Profitability & Free Cash Flow Total Revenue +0.1% YoY and +6.8% excluding L&S 7.9% operating margin; 11.5% non-GAAP operating margin Revenue declined (2.1%) in constant currency and grew 4.3% in 4Q cash from operations of $23M and free cash flow of $4M constant c
Slide 5: Revenue ($M)
Revenue ($M) 4Q 23 FY 23 +1.8% YoY +0.1% YoY +1.6% cc2 YoY (2.1%) cc2 YoY +4.9% YoY +4.9% cc2 YoY +6.8% YoY +4.3% cc2 YoY $1,980 $2,015 $557 $558 $1,512 $1,586 $387 $413 2022 2023 2022 2023 2022 2023 2022 2023 1 Total Company Ex-L&S Total Company Ex-L&S1 Total Company decline in constant currency du
Slide 6: Segment Revenue ($M)
Segment Revenue ($M) DWS CA&I ECS Up 6.3% in cc1, or up 8.9% as Down 0.5% in cc1, or up 0.1% as Down 12.2% in cc1, or down reported reported 10.0% as reported 4Q 23 $226 $203 $139 $139 $139 $128 2022 2023 2022 2023 2022 2023 Growth primarily driven by new Growth primarily driven by new Decline drive
Slide 7: Gross Margins ($M)
Gross Margins ($M) 4Q 23 FY 23 160 bps contraction 70 bps expansion 470 bps expansion 390 bps expansion 34.1% 32.5% 27.4% 26.7% 16.5% 15.1% 11.8% 11.2% 2022 2023 2022 2023 2022 2023 2022 2023 Total Company Ex-L&S1 1 Total Company Ex-L&S Total Company margin decline driven by the timing Total company
Slide 8: Segment Gross Margins ($M)
Segment Gross Margins ($M) DWS CA&I ECS 20 bps expansion 270 bps contraction 590 bps contraction 4Q 23 15.1% 15.3% 19.0% 73.3% 16.3% 67.4% 2022 2023 2022 2023 2022 2023 Expansion primarily driven by new Margin decline primarily due to the prior Contraction driven by the timing of business with exist
Slide 9: Operating Profit, Net Income & Adjusted EBITDA ($M)
Operating Profit, Net Income & Adjusted EBITDA ($M) 4Q 23 FY 23 4Q GAAP & Non-GAAP1 Operating 4Q GAAP Net Income & Full-Year GAAP & Non-GAAP1 Full-Year GAAP Net Income & Profit & Margin Adj. EBITDA1 and Margins Operating Profit & Margin Adj. EBITDA1 and Margins 20.2% 26.7% 16.5% 8.0% 7.0% 14.2% $112
Slide 10: Diluted Earnings Per Share & Cash Flow ($M)
Diluted Earnings Per Share & Cash Flow ($M) 4Q 23 FY 23 4Q GAAP & Non-GAAP1 Diluted 4Q Operating Cash Flow Full-Year GAAP & Non-GAAP1 Full-Year Operating Cash Earnings Per Share & Free Cash Flow1 Diluted Earnings Per Share Flow & Free Cash Flow1 $35 $74 $23 $1.22 $14 $1.10 $0.51 $4 $0.60 $13 $0.12 (
Slide 11: 4Q23 & FY23 EBITDA and Cash Flow Detail
4Q23 & FY23 EBITDA and Cash Flow Detail $M 4Q23 4Q22 FY23 FY22 EBITDA 1 ($ 103.6) $ 85.1 ($ 204.5) $ 140.9 ADJUSTED EBITDA 1 $ 100.4 $ 148.7 $ 285.9 $ 325.8 ADJUSTED EBITDA MARGIN 1 18.0% 26.7% 14.2% 16.5% OPERATING CASH FLOW $ 23.0 $ 34.9 $ 74.2 $ 12.7 CAPITAL EXPENDITURES ($ 19.0) ($ 21.1) ($ 78.7
Slide 12: Leverage Detail
Leverage Detail $M DECEMBER 31, 2023 SENIOR SECURED NOTES 1 $ 485.0 FINANCE LEASES AND OTHER DEBT 23.8 TOTAL DEBT $ 508.8 GLOBAL NET PENSION DEFICIT (AS OF DEC 31, 2023) 703.0 TOTAL DEBT INCLUDING PENSION DEFICIT $ 1,211.8 CASH $ 387.7 NET LEVERAGE $ 121.1 NET LEVERAGE INCLUDING PENSION DEFICIT $ 82
Slide 13: Defined Benefit Plans Update
Defined Benefit Plans Update Global GAAP deficit increased by approximately $160 million to ~$700 million. • ~$70 million of the increase was related to the purchase of insurance contracts by our overfunded UK plans as a first step in eliminating the plans from the corporate balance sheet, effective
Slide 14: Expected 10-Year Company Cash Contributions ($M)
Expected 10-Year Company Cash Contributions ($M) • As of December 31, 2023, our expectation is for contributions to our US defined benefit pension plans to begin in 2025 and average $74M per year through 2032, down from the $82M we expected at 4Q 2022. • Expected contributions to our global pension
Slide 15: Financial Guidance
Financial Revenue Growth (1.5%) to 1.5% Guidance in Constant Currency Non-GAAP Full-Year Operating Profit Margin 5.5% to 7.5% 2024 Guidance Assumptions & Other 2024 Expectations • Constant currency revenue guidance implies (1.0%) to 2.0% revenue growth as reported, based on recent exchange rates and
Slide 16: Our Approach to Data Analytics, AI & Generative AI
Our Approach to Data Analytics, AI & Generative AI We utilize deep client relationships, industry insights, and thought leadership to develop high value capabilities for our clients delivered through advisory, tailored and industry-specific solutions Insights & Relationships Delivery & Value Realiza
Slide 17: Appendix
Appendix Us unisys
Slide 18: 4Q 2023 Revenue Profile
4Q 2023 14% 12% Revenue Profile SEGMENT 36% 14% GEOGRAPHY 25% 48% 26% 25% 26% US & Canada EMEA ECS DWS CA&I All Other Latin America Asia Pacific Ex-L&S MIX OF TOTAL COMPANY REVENUE 74% 28% 38% 22% CLIENT REVENUE SECTOR TYPE Ex-L&S Solutions L&S Solutions 34% 78% Public Sector Recurring Non-Recurring
Slide 19: Full-Year 2023 Revenue Profile
Full-Year 2023 12% 15% 32% Revenue Profile 13% SEGMENT GEOGRAPHY 26% 45% 27% 30% 21% US & Canada EMEA ECS DWS CA&I All Other Asia Pacific Latin America Ex-L&S MIX OF TOTAL COMPANY REVENUE 79% 32% 36% 23% CLIENT REVENUE SECTOR TYPE Ex-L&S Solutions L&S Solutions 77% 38% Next-Gen Solutions Mix 32% as
Slide 20: Estimated Sensitivity for U.S. Qualified Defined Benefit Pension Plans
Estimated Estimated Sensitivities To 2024 U.S. Total Trust Return and December 31, 2024, AA Corporate Bond Yields Sensitivity for U.S. Qualified Estimated implied year-end 2024 GAAP Deficit for U.S. Qualified Defined Benefit Defined Benefit Pension Plans ($M) 2024 Return Pension Plans 0% 7.4% 15% -1
Slide 21: Excluding License and Support (Ex-L&S)
Excluding License and Support (Ex-L&S) $M 4Q23 4Q22 FY23 FY22 GAAP REVENUE $ 557.6 $ 557.0 $ 2,015.4 $ 1,979.9 L&S REVENUE 144.3 170.1 429.1 468.0 EX-L&S REVENUE (NON-GAAP) $ 413.3 $ 386.9 $ 1,586.3 $ 1,511.9 GAAP GROSS PROFIT $ 181.2 $ 189.8 $551.3 $ 529.6 L&S GROSS PROFIT 112.8 144.1 311.3 360.8 E
Slide 22: Non-GAAP Operating Profit
Non-GAAP Operating Profit $M 4Q23 4Q22 FY23 FY22 GAAP OPERATING INCOME $ 44.0 $ 50.0 $ 76.9 $ 52.2 CERTAIN LEGAL MATTERS 1 11.4 6.8 35.2 16.0 COST REDUCTION AND OTHER 8.4 55.1 27.4 88.7 EXPENSES 2 POSTRETIREMENT EXPENSE 1 0.2 0.5 1.3 2.1 NON-GAAP OPERATING PROFIT $ 64.0 $ 112.4 $ 140.8 $ 159.0 REVEN
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $M 4Q23 4Q22 FY23 FY22 NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 165.3) $ 8.5 ($ 430.7) ($ 106.0) NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS 1.1 0.3 3.6 1.1 INTEREST EXPENSE, NET OF INTEREST INCOME OF $6.3, $3.7, $26.3 AN D 1.6 4.1 4.5 20.0 $12.4 RESPECTIVEL
Slide 24: Non-GAAP Net Income
Non-GAAP Net Income $M EXCEPT SHARE AND PER SHARE DATA 4Q23 4Q22 FY23 FY22 GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION ($ 165.3) $ 8.5 ($ 430.7) ($ 106.0) POST-RETIREMENT EXPENSE: PRETAX 174.4 11.2 388.5 45.3 TAX (0.1) 0.1 (0.7) 0.5 NET OF TAX $ 174.5 $ 11.1 $ 389.2 $ 44.8 CERTAIN LEGA
Slide 25: Non-GAAP Diluted Earnings Per Share
Non-GAAP Diluted Earnings Per Share $M EXCEPT SHARE AND PER SHARE DATA 4Q23 4Q22 FY23 FY22 NON-GAAP NET INCOME ATTRIBUTABLE TO UNISYS CORPORATION $ 35.4 $ 82.8 $ 41.7 $ 74.8 WEIGHTED AVERAGE SHARES (THOUSANDS) 68,402 67,793 68,254 67,665 PLUS INCREMENTAL FROM ASSUMED CONVERSION OF EMPLOYEE STOCK PLA
Slide 26: Adjusted Free Cash Flow
Adjusted Free Cash Flow $M 4Q23 4Q22 FY23 FY22 CASH PROVIDED BY OPERATIONS $ 23.0 $ 34.9 $ 74.2 $ 12.7 ADDITIONS TO MARKETABLE SOFTWARE (13.1) (11.1) (46.0) (46.3) ADDITIONS TO PROPERTIES (5.9) (9.5) (21.3) (31.0) ADDITIONS TO OUTSOURCING ASSETS - (0.5) (11.4) (8.6) FREE CASH FLOW $ 4.0 $ 13.8 ($ 4.
Slide 27: Non-GAAP Net Income Margin
Non-GAAP Net Income Margin $M 4Q23 4Q22 FY23 FY22 REVENUE $ 557.6 $ 557.0 $ 2,015.4 $ 1,979.9 NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS ($ 165.3) $ 8.5 ($ 430.7) ($ 106.0) NON-GAAP NET INCOME ATTRIBUTABLE TO UNISYS $ 35.4 $ 82.8 $ 41.7 $ 74.8 NET INCOME (LOSS) AS A % OF REVENUE (29.6%) 1.5% (21.4%) (
Slide 28: Unisys Logistics Optimization
Unisys Logistics Optimization TM Pre-trained data models 01 Optimize logistics management processes Built-in machine learning 02 Optimizes models with no data training required An advanced analytics solution that uses quantum annealing to compile multiple disparate data sources to Quantum annealing
Slide 29: 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 30: Unisys Segment and Solutions Map
Unisys Segment and Solutions Map SEGMENT / REPORTING DESCRIPTION NEXT-GEN SOLUTIONS TRADITIONAL SOLUTIONS We advise and execute the deployment, Modern Workplace: unified communications Traditional Workplace: traditional Digital Workplace integration and management of technologies, & collaboration (U
Slide 31: 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 certain legal matters related to professional services and legal fees, including legal defense costs, associated with certain legal proceedi
Slide 32: 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
Unisys Corporation New — Q4 2023 Earnings Presentation on 6ix