Avaya — Citigroup 12th Annual Global Technology Conference (September 2005)
18 slides from Avaya's conference presentation, Sep 8, 2005
Slide 1: Citigroup 12th Annual Global Technology Conference
Citigroup 12th Annual Global Technology Conference Garry K. McGuire CFO & SVP Corporate Development September 8, 2005 © 2005 Avaya Inc. All rights reserved.
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements regarding Avaya’s expected performance and outlook for operating results are based on current ex
Slide 3: Platform for Building Shareholder Value
Platform for Building Shareholder Value l de r a r eho S h T erm e Long Valu Financial Stability Technology Leadership Expanded Presence Enterprise Leadership © 2005 Avaya Inc. All rights reserved. 3
Slide 4: A Leader in Enterprise Communications
A Leader in Enterprise Communications A Rich History Over 100 years of voice experience and expertise Clear focus on the enterprise Global services organization Voice experience and expertise Comprehensive applications portfo Significant installed base Migration choices © 2005 Avaya Inc. All rights
Slide 5: Leadership
Leadership Challengers Leaders The Avaya Gartner Magic Cisco Systems NEC Nortel Networks Quadrant Ability to Inter-Tel Siemens North American Execute Corporate Toshiba Mitel Networks Telephony, ShoreTel Alcatel August 2005 3Com Vertical Communications Niche Players Visionaries Completeness of Vision
Slide 6: Industry Leading Market Share
Industry Leading Market Share Delivered 7 millionth IP Line 3Q05 Avaya IPT Lines Avaya IPT 7M Shipped (accum.) Market Share 24% 24% 5M 22% 20% 16% 3M 10% 7% 10% 1M 2000 2001 2002 2003 2004 © 2005 Avaya Inc. All rights reserved. Market share, ports shipped – Synergy Research 6
Slide 7: Leveraging Core Competencies World Wide
Leveraging Core Competencies World Wide Expanding World Wide Presence Acquisitions and partnerships add size and scale in Europe and Asia Pacific region IP technology transition accelerating in EMEA and Asia Pacific regions Enhanced capabilities and services presence Opportunity to upgrade installed
Slide 8: Greater Opportunity for Growth
Greater Opportunity for Growth North America EMEA Telephony APAC Telephony Telephony Base Base Base 182M 170M 129M 109M 113M 112M IP IP Telephony IP Telephony CAGR Telephony 52% CAGR 13% CAGR 7% 5% 52% 40% 49% 37% 27% IP IP IP IP IP IP 2004 2008 2004 2008 2004 2008 Source: Avaya analysis based on in
Slide 9: Delivering Intelligent Communications
Delivering Intelligent Communications Extending Technology Leadership R&D, M&A and partnerships to broaden and deepen product portfolio © 2005 Avaya Inc. All rights reserved. 9
Slide 10: Road to Intelligent Communications
Road to Intelligent Communications Intelligent Enterprise Real-time Embedded Enterprise Converged Business Agility Competitive Differentiation Cost Reduction Traditional Operational Efficiency Process Improvement Distributed Applications Customer Loyalty Voice Security, Reliability Employee Retentio
Slide 11: Delivering a New Standard
Delivering a New Standard Wynn Las Vegas Solution Integrated multi-vendor IP-based solution led by Avaya and including Extreme Networks, Juniper, Citrix, NICE, and SDC solutions Intelligence Created Automated personalization of guest room experience. Empowers guests and staff with information, mobil
Slide 12: Leveraging Business Model for Profitable Growth
Leveraging Business Model for Profitable Growth Building Financial Strength Operating leverage with revenue growth Expense management discipline Consistently managing working capital Efficient capital allocation Substantially all debt retired Initiated share repurchases © 2005 Avaya Inc. All rights
Slide 13: Driving Results…Creating Value
Driving Results…Creating Value Cash Flow from Operations ($M) YTD FY05 © 2005 Avaya Inc. All rights reserved. 13
Slide 14: Cash Flow and Debt Retirement Enhance Balance Sheet
Cash Flow and Debt Retirement Enhance Balance Sheet Over $1 billion in debt retired since FY2001 Share repurchases of $47 million ($500 million authorized) ($M) Debt Net Cash (Debt) © 2005 Avaya Inc. All rights reserved. 14
Slide 15: Recent Performance
Recent Performance Go-to-market disruptions impacted Q1 and Q2 Q3 performance – Revenues grew sequentially • Product sales increased 4.2% • U.S. sales up 4% – Gross margin increased from 46.1% to 46.5% – Operating income increased 46% to $76 million – Operating margins improved to 6.1% from 4.6% © 2
Slide 16: Tenovis integration update
Tenovis integration update Results in-line with our expectations Consolidation of most legal entities and support functions Cooperation from Works Councils European sales teams cross-selling our combined portfolio Focused on capturing share and revenue growth in EMEA and leveraging our combined capa
Slide 17: Looking Ahead–Maintain Focus and Execution
Looking Ahead–Maintain Focus and Execution Build and increase our position in the marketplace, leveraging our strengths Drive complete Tenovis integration – Keep financial performance on track – Harvest combined strengths to capture revenue opportunities Maintain financial discipline company wide St
Slide 18: Citigroup 12th Annual Global Technology Conference
Citigroup 12th Annual Global Technology Conference Garry K. McGuire CFO & SVP Corporate Development September 8, 2005 © 2005 Avaya Inc. All rights reserved.
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