Slide 1: 2nd Quarter FY 2019 Earnings Presentation
2nd Quarter FY 2019 Earnings Presentation November 6, 2018
Slide 2: Non-GAAP financial measures
Non-GAAP financial measures We present non-GAAP financial measures of performance which are derived from the unaudited condensed consolidated statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), EBIT margin, adjusted EBIT, adjusted E
Slide 3: Forward-looking statements
Forward-looking statements All statements in this presentation that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statem
Slide 4: 2nd Quarter FY 2019 - Mike Lawrie
2nd Quarter FY 2019 Earnings Presentation Mike Lawrie Chairman, President and Chief Executive Officer
Slide 5: Key messages
Key messages Q2 non-GAAP EPS of $2.02 (1) Revenue of $5B — down 6.2% YoY in cc Digital revenue up 6.4% YoY in cc with a book-to-bill of 1.8x Expanded Adjusted EBIT margins by 230 basis points YoY Raising FY19 non-GAAP EPS(1) target to $7.95 – $8.20 from continuing operations 1 Excludes restructuring
Slide 6: 2nd Quarter FY 2019 - Paul Saleh
2nd Quarter FY 2019 Earnings Presentation Paul Saleh Executive Vice President and Chief Financial Officer
Slide 7: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results Q2 FY19 Transaction, Amortization of Restructuring separation and Tax Non-GAAP (in millions except EPS) GAAP acquired intangible costs integration-related adjustment results assets costs Income from continuing operations before income taxes 332 157 128 132 - 749 In
Slide 8: 2nd quarter results
2nd quarter results Q2 YTD FY19 FY18 FY19 FY18 Revenue ($M) $ 5,013 $ 5,453 $ 10,295 $ 10,689 – YoY Growth – GAAP (8.1%) (3.7%) – YoY Growth – cc (6.2%) (4.1%) – QtQ Growth – GAAP (5.1%) — – QtQ Growth – cc (3.2%) — Adjusted EBIT ($M) 799 740 1,602 1,310 Adjusted EBIT Margin (%) 15.9% 13.6% 15.6% 12
Slide 9: Global Business Services (GBS)
Global Business Services (GBS) Q2 FY19 Q2 FY18 YTD FY19 YTD FY18 Revenue ($M) $ 2,111 $ 2,311 $ 4,324 $ 4,578 – YoY Growth – GAAP (8.7%) (5.5%) – YoY Growth – cc (6.9%) (5.8%) – QtQ growth – GAAP (4.6%) — – QtQ growth – cc (2.9%) — GBS Profit ($M) 400 369 803 643 GBS Profit Margin (%) 18.9% 16.0% 18
Slide 10: Global Infrastructure Services (GIS)
Global Infrastructure Services (GIS) Q2 FY19 Q2 FY18 YTD FY19 YTD FY18 Revenue ($M) $ 2,902 $ 3,142 $ 5,971 $ 6,111 – YoY Growth – GAAP (7.6%) (2.3%) – YoY Growth – cc (5.7%) (2.8%) – QtQ growth – GAAP (5.4%) — – QtQ growth – cc (3.4%) — GIS Profit ($M) 473 450 947 721 GIS Profit Margin (%) 16.3% 14
Slide 11: Financial highlights
Financial highlights Q2 FY19 YTD FY19 Cash Flow ► Adjusted Free Cash Flow $604M $925M Performance ► Cap Ex — Including Capital Leases $308M $676M ► Cap Ex as a % of Revenue 6.1% 6.6% Q2 FY19 YTD FY19 Capital to Capital to ► Cash Dividends $54M $105M Shareholders Shareholders $127M $451M ► Share Repu
Slide 12: FY 2019 targets
FY 2019 targets Revenue $20.7B – $21.2B Non-GAAP EPS(1) $7.95 – $8.20 Adjusted Free Cash Flow 90%+ of Adj. Net Income(1) 1 Excludes restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and tax adjustment 2nd Quarter FY 2019 Earnings
Slide 13: Bookings
Bookings(1) FY18 FY19 $B $5.5 $5.3 $4.9 $4.6 $4.7 $2.5 $2.0 $3.3 $2.0 $2.2 $2.8 $2.9 $2.6 $2.2 $2.5 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 GBS Global Business Services GIS Global Infrastructure Services 1 The summation of the quarter bookings number may not equal the full-year number, due to roundi
Slide 14: Supplemental Information
2nd Quarter FY 2019 Earnings Presentation Supplemental Information
Slide 15: Non-GAAP reconciliations
Non-GAAP reconciliations EBIT and Adjusted EBIT (in millions) Q2 FY19 Q2 FY18 YTD FY19 YTD FY18 Net income $ 259 $ 265 $ 525 $ 438 Income from discontinued operations, net of taxes - (60) (35) (125) Income tax expense 73 79 202 62 Interest income (33) (16) (65) (32) Interest expense 83 73 168 147 EB
Slide 16: Non-GAAP reconciliations
Non-GAAP reconciliations Segment profit (in millions) Q2 FY19 Q2 FY18 YTD FY19 YTD FY18 GBS profit $ 400 $ 369 $ 803 $ 643 GIS profit 473 450 947 721 All other profit (loss) (74) (79) (148) (54) Interest income 33 16 65 32 Interest expense (83) (73) (168) (147) Restructuring costs (157) (188) (342)
Slide 17: Q2 FY19 non-GAAP results
Q2 FY19 non-GAAP results Transaction, Amortization of Restructuring separation and Tax Non-GAAP (in millions except EPS) GAAP acquired costs integration- adjustment results intangible assets related costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 3,518 $ - $
Slide 18: YTD FY19 non-GAAP results
YTD FY19 non-GAAP results Transaction, Amortization of Restructuring separation and Tax Non-GAAP (in millions except EPS) GAAP acquired costs integration- adjustment results intangible assets related costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 7,385 $ -
Slide 19: Q2 FY18 non-GAAP results
Q2 FY18 non-GAAP results Transaction, Amortization of Restructuring separation and Tax Non-GAAP (in millions except EPS) GAAP acquired costs integration- adjustment results intangible assets related costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 3,870 $ - $
Slide 20: YTD FY18 non-GAAP results
YTD FY18 non-GAAP results Transaction, Amortization of Restructuring separation and Tax Non-GAAP (in millions except EPS) GAAP acquired costs integration- adjustment results intangible assets related costs Cost of services (excludes depreciation and amortization and restructuring costs) $ 8,179 $ -
Slide 21: Adjusted free cash flow
Adjusted free cash flow (in millions) Q2 FY19 YTD FY19 Net cash provided by operating activities $ 412 $ 885 Net cash used in investing activities 200 (84) Acquisitions, net of cash acquired - 43 Business dispositions - 65 Payments on capital leases and other long-term asset financings (216) (475) P
Slide 22: Non-GAAP and other definitions
Non-GAAP and other definitions Segment profit: Segment revenue less costs of services, segment selling, general and administrative, depreciation and amortization, and other income, excluding the movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities an
Slide 23: DXC.technology
v DXC.technology D,