Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Shareholder Meeting (April 2006)
24 slides from Unisys Corporation New's shareholder meeting presentation, Apr 20, 2006
Slide 1: 2006 Annual Shareholder Meeting
2006 Annual Shareholder Meeting April 20, 2006 Ric Duques Chairman Webcast available on www.unisys.com/investor
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 assumptio
Slide 3: Call to Order / Introductions
Call to Order / Introductions Officers on stage: • Joe McGrath, President & CEO • Janet Haugen, Chief Financial Officer • Nancy Sundheim, General Counsel Director nominees: • Randy Hogan • Ed Huston • Leslie Kenne • Joe McGrath
Slide 4: Call to Order / Introductions
Call to Order / Introductions Continuing Directors: • J. P. Bolduc • Jim Duderstadt • Ric Duques • Matt Espe • Denise Fletcher • Clay Jones • Ted Martin Other onsite officers/executives: • Greg Baroni, VP & Pres., Global Public Sector • Peter Blackmore, EVP & Pres., Worldwide Sales & Marketing • Pat
Slide 5: Call to Order / Introductions
Call to Order / Introductions Organization of the Meeting • Notice & Quorum • Stockholder List • Appointment of Inspectors of Election Presentation of Proposals • Election of Directors • Selection of Independent Registered Public Accounting Firm Opening of the Polls Closing of the Polls
Slide 6: Report to Stockholders
Report to Stockholders Joe McGrath President & CEO
Slide 7: 2005 in Review
2005 in Review • 2005 was year of major changes and challenges at Unisys • Financial results impacted by: – Operational issues in outsourcing business – Lower-than-expected demand in technology – Higher pension expense • Also took $1.57 billion charge to adjust deferred tax asset valuation • Resulte
Slide 8: Refocusing of Unisys
Refocusing of Unisys • Beneath disappointing financial results, major work was done to fundamentally reposition Unisys for the future • Conducted comprehensive review of strategy, operations – Major, multi-month effort overseen by Board • Arrived at new business model for Unisys – More focused … str
Slide 9: 2005 Financial Results
2005 Financial Results Customer Revenue: $5,759 Million 2005 % Customer Change Revenue vs. 2004 Services $4,789M +1% Technology $970M -11% Overall $5,759M -1%
Slide 10: 2005 Services Revenue
2005 Services Revenue Customer Revenue: $4,789 Million 2005 % Customer Change Revenue vs. 2004 Consulting/SI $1,655M Flat Outsourcing $1,830M +6% Infrastructure $801M +3% Services Core $503M -12% Maintenance Overall $4,789M +1%
Slide 11: 2005 Technology Revenue
2005 Technology Revenue Customer Revenue: $970 Million 2005 % Customer Change Revenue vs. 2004 Enterprise $786M -10% Servers Specialized $184M -18% Technology Overall $970M -11%
Slide 12: Fundamentals of Repositioning Plan
Fundamentals of Repositioning Plan • Designed to improve profitability, address performance issues, enhance success in market • Key elements of plan: – Focus investment/resources on high-growth markets … pool delivery resources around growth areas – Divest non-core assets – Reduce cost structure … g
Slide 13: High-Growth Market Focus Areas
High-Growth Market Focus Areas Services Focus Market Size ’05-’08 CAGR Outsourcing – BPO, ITO, infrastructure $300B 8-10% Enterprise security $15B ~20% Open source/Linux services $15B ~20% Microsoft services and solutions $20B ~10% Driven with vertical industry consulting expertise Sources: Internat
Slide 14: Technology Focus
Technology Focus ClearPath and ES7000 Leverage industry partners for platform manufacturing / design Focus on operating systems and software as differentiator / intellectual property Continuous improvement in features and functions – modernization, J2EE, Windows, Linux Volume driver: Focus on high-g
Slide 15: Actions to Focus Resources
Actions to Focus Resources Area Actions • Concentrate on 10 countries … ~85% of revenue Geographic • Restructure 30 smaller countries into simplified, client-based model Clients • Focus on top 500 accounts … ~85% of revenue • Pool systems integration consulting delivery resources, build critical mas
Slide 16: Cost Reduction Actions
Cost Reduction Actions Annual Area Actions Cost Savings • Reduce overcapacity Services $125M in delivery resources • Rightsize cost structure, rationalize Technology $50M R&D / manufacturing spending • Drive down SG&A expenses, Other $75M continue Six Sigma Total $250M+
Slide 17: Repositioning – 1Q06 Accomplishments
Repositioning – 1Q06 Accomplishments 9 Restructured iPSL payment processing operation in U.K. 9 Began divestitures of non-core assets/businesses … sold shares in NUL for $378 million 9 Began process of rightsizing cost structure … headcount reductions 9 Adopted changes to U.S. retirement plans 9 Rea
Slide 18: Seeing Initial Signs of Progress
Seeing Initial Signs of Progress • Double-digit order growth in 4Q05, 1Q06 – Driven by double-digit order gains in services • Revenue growing again – Revenue up 2% in 1Q06 … 5% in constant currency – Services revenue up 6% in 1Q06 … 9% excluding core maintenance • Technology business remains weak –
Slide 19: Expectations for 2006
Expectations for 2006 • Transitional year … not giving earnings guidance • Expect revenue growth in low to mid single-digits before divestitures • Expect outsourcing, SI/consulting, ES7000 businesses to mirror or exceed market rates • Declines in ClearPath, core maintenance
Slide 20: Long-Term Financial Goals (2008)
Long-Term Financial Goals (2008) • Revenue growth in targeted areas at or above industry average • Build each of strategic growth areas to at least $500M in revenue by 2008 • Overall company financial goals – 2008 – Revenue growth in mid to high single-digits – Operating profit margin between 8-10%,
Slide 21: Summary: Focus and Grow
Summary: Focus and Grow • Positioning Unisys in large, mainstream, fast-growing markets • Rightsizing company cost structure to new, more focused model • Focus on significantly improving utilization and services margins • Pooling delivery resources to complement targeted market areas • Divesting non
Slide 22: Questions & Answers
Questions & Answers Joe McGrath President & CEO
Slide 23: Preliminary Voting Results
Preliminary Voting Results Final voting results will be posted on www.unisys.com/investor as soon as they are available
Slide 24: 2006 Annual Shareholder Meeting
2006 Annual Shareholder Meeting April 20, 2006