Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Q2 2024 Earnings Presentation
25 slides from Unisys Corporation New's earnings presentation, Aug 6, 2024
Slide 1: Second Quarter 2024 Financial Results
Second Quarter Peter Altabef Chair and CEO 2024 Financial Results Deb McCann CFO AUGUST 5, 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: 2Q24 Highlights
2Q24 Highlights Revenue Operating Profit & Free Cash Flow Second quarter revenue in-line with expectations: up 0.3% YoY or Operating Margin of 4.9%; Non-GAAP Operating Margin 6.1%: up 0.5% in constant currency expansion of 490 bps YoY and 270 bps YoY, respectively Ex-L&S revenue flat YoY and +0.1% i
Slide 4: 2Q Revenue ($M)
2Q Revenue ($M) COMPANY DWS CA&I ECS +0.3% YoY +0.5% cc1 YoY 0.0% YoY Down 2.2% in cc1, or Up 1.3% in cc1, or up 1.3% Up 2.5% in cc1, or up 2.2% down 2.1% as reported as reported as reported +0.1% cc1 YoY $477 $478 $396 $396 $135 $132 $133 $134 $135 $138 2023 2024 2023 2024 2023 2024 2023 2024 2023
Slide 5: 2Q Gross Margin
2Q Gross Margin COMPANY DWS CA&I ECS 180 bps expansion +290 bps YoY 260 bps expansion 90 bps expansion +270 bps YoY 54.1% 55.9% 24.3% 27.2% 16.0% 18.7% 13.6% 16.2% 16.9% 17.8% 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 1 Total Company Ex-L&S Expansion was primarily driven by delivery Expansio
Slide 6: 2Q Profitability and Free Cash Flow ($M, except per share data)
2Q Profitability and Free Cash Flow ($M, except per share data) 2Q GAAP & Non-GAAP1 Operating 2Q GAAP Net Income (Loss) 2Q GAAP & Non-GAAP1 Diluted 2Q Operating Cash Flow Profit & Margins & Adj. EBITDA1 and Margins Earnings Per Share & Free Cash Flow1 12.2% 6.1% 10.5% 4.9% $43 3.4% $25 $50 $58 0.0%
Slide 7: 2Q24 EBITDA and Cash Flow Detail
2Q24 EBITDA and Cash Flow Detail $M 2Q24 2Q23 YTD24 YTD23 EBITDA 1 $ 35.6 $ 9.2 ($ 68.6) ($ 108.6) ADJUSTED EBITDA 1 $ 58.4 $ 50.3 $ 123.7 $ 148.5 ADJUSTED EBITDA MARGIN 1 12.2% 10.5% 12.8% 15.0% OPERATING CASH FLOW $ 2.7 $ 42.5 $ 26.5 $ 55.3 CAPITAL EXPENDITURES ($ 21.2) ($ 17.8) ($ 41.1) ($ 38.1)
Slide 8: Leverage Detail
Leverage Detail $M JUNE 30, 2024 SENIOR SECURED NOTES 1 $ 485.0 FINANCE LEASES AND OTHER DEBT 15.4 TOTAL DEBT $ 500.4 GLOBAL NET PENSION DEFICIT (AS OF DEC 31, 2023) 703.0 TOTAL DEBT INCLUDING PENSION DEFICIT $ 1,203.4 CASH $ 344.9 NET LEVERAGE $ 155.5 NET LEVERAGE INCLUDING PENSION DEFICIT $ 858.5
Slide 9: Reiterating Financial Guidance
Revenue Growth in Constant Currency (1.5%) to 1.5% Reiterating Non-GAAP Operating Profit Margin 5.5% to 7.5% Financial Guidance Guidance Assumptions & Other 2024 Expectations • Constant currency revenue guidance implies (1.7%) to 1.3% revenue growth as Full-Year 2024 reported, based on recent exchan
Slide 10: Our Opportunity
Grow Ex-L&S Accelerate Invest in our core revenue growth rate L&S platforms Our Building awareness and recognition of our solutions & capabilities Through AI-related services and industry solutions such as Unisys Leveraging expertise in hybrid compute to increase value for clients Opportunity Logist
Slide 11: The Unisys Transformation
The Unisys Transformation 2025 & Beyond Accelerating Growth 2024 Improving Free Cash Positive Inflection in New Flow Generation 2023 Logo Signings Deleveraging Pension Expecting Positive Free Liabilities Leader Recognition in Key Cash Flow 2022 Analyst & Advisor Reports Expansion of Alliance Return
Slide 12: Appendix
Appendix Us unisys
Slide 13: 2Q 2024 Revenue Profile
2Q 2024 13% 15% 29% Revenue Profile SEGMENT 15% GEOGRAPHY 44% 28% Diverse revenue mix across solutions, 28% 28% geographies and client US & Canada EMEA ECS CA&I DWS All Other sectors with more than Latin America Asia Pacific ~80% recurring revenue 17% 29% 37% CLIENT 83% SECTOR SOLUTION 34% Commercia
Slide 14: Cargo Industry Solutions Unisys Logistics Optimization
Cargo Industry Solutions Unisys Logistics Optimization Unisys Logistics Optimization expands on our Optimizes the whole supply chain to increase revenue, existing suite of digital cargo solutions which can reduce costs, and improve operational efficiency be integrated or consumed on a standalone bas
Slide 15: Potential Economic Benefit of Tax Assets
Potential Economic Benefit of Tax Assets FUTURE AVAILABLE NET DEFERRED TAX $M DESCRIPTION REDUCTIONS IN ASSETS 1 TAXABLE INCOME U.S. NOLS AND TAX CREDITS: NET OPERATING LOSS – FEDERAL & STATE $ 546 $1,743 TAX CREDITS 112 533 PENSION AND OTHER: PENSION 127 519 OTHER DEFERRED TAX ASSETS 99 405 TOTAL A
Slide 16: Excluding License and Support (Ex-L&S)
Excluding License and Support (Ex-L&S) $M 2Q24 2Q23 YTD24 YTD23 REVENUE $ 478.2 $ 476.8 $ 966.0 $ 993.2 L&S REVENUE 82.1 80.8 175.3 217.7 EX-L&S NON-GAAP REVENUE $ 396.1 $ 396.0 $ 790.7 $ 775.5 GROSS PROFIT $ 129.9 $ 115.8 $ 265.9 $ 274.8 L&S GROSS PROFIT 55.7 52.4 120.5 158.9 EX-L&S NON-GAAP GROSS
Slide 17: Non-GAAP Operating Profit
Non-GAAP Operating Profit $M 2Q24 2Q23 YTD24 YTD23 GAAP OPERATING INCOME $ 23.6 $ 0.1 $ 41.3 $ 50.0 CERTAIN LEGAL MATTERS 1 3.1 8.7 10.4 14.4 COST REDUCTION AND OTHER EXPENSES 2 2.3 7.1 11.3 11.3 PENSION AND POSTRETIREMENT EXPENSE 1 0.3 0.4 0.7 0.7 NON-GAAP OPERATING PROFIT $ 29.3 $ 16.3 $ 63.7 $ 76
Slide 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation $M 2Q24 2Q23 YTD24 YTD23 NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION ($ 12.0) ($ 40.0) ($ 161.5) ($ 215.4) NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING (0.5) 0.5 (0.3) 1.4 INTERESTS INTEREST EXPENSE, NET OF INTEREST INCOME OF $5.3, $6.5, $11.9 2.6 1.0 3.9 1.9 AND $
Slide 19: Non-GAAP Net Income
Non-GAAP Net Income $M EXCEPT SHARE AND PER SHARE DATA 2Q24 2Q23 YTD24 YTD23 NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION ($ 12.0) ($ 40.0) ($ 161.5) ($ 215.4) PENSION & POSTRETIREMENT EXPENSE: PRETAX 12.4 10.6 159.0 203.8 TAX 0.1 (0.2) 0.2 (0.4) NET OF TAX $ 12.3 $ 10.8 $ 158.8 $ 204.2 CERTAIN LEGAL
Slide 20: Non-GAAP Diluted Earnings Per Share
Non-GAAP Diluted Earnings Per Share $M EXCEPT SHARE AND PER SHARE DATA 2Q24 2Q23 YTD24 YTD23 NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS CORPORATION $ 11.0 ($ 6.1) $ 13.7 $ 28.6 WEIGHTED AVERAGE SHARES (THOUSANDS) 69,275 68,289 68,990 68,116 PLUS INCREMENTAL FROM ASSUMED VESTING OF EMPLOYEE ST
Slide 21: Adjusted Free Cash Flow
Adjusted Free Cash Flow $M 2Q24 2Q23 YTD24 YTD23 FY23 CASH PROVIDED BY OPERATIONS $ 2.7 $ 42.5 $ 26.5 $ 55.3 $ 74.2 ADDITIONS TO MARKETABLE SOFTWARE (12.5) (11.0) (25.7) (21.3) (46.0) ADDITIONS TO PROPERTIES (5.1) (4.6) (7.3) (11.9) (21.3) ADDITIONS TO OUTSOURCING ASSETS (3.6) (2.2) (8.1) (4.9) (11.
Slide 22: Non-GAAP Net Income Margin
Non-GAAP Net Income Margin $M 2Q24 2Q23 YTD24 YTD23 REVENUE $ 478.2 $ 476.8 $ 966.0 $ 993.2 NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION ($ 12.0) ($ 40.0) ($ 161.5) ($ 215.4) NON-GAAP NET INCOME (LOSS) ATTRIBUTABLE TO UNISYS $ 11.0 ($ 6.1) $ 13.7 $ 28.6 NET LOSS ATTRIBUTABLE TO UNISYS CORPORATION (2.
Slide 23: 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 24: Definitions of Non-GAAP Financial Metrics
Definitions of Non-GAAP Financial Metrics Non-GAAP operating profit – This measure excludes pretax pension and 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 le
Slide 25: 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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