Slide 1: Dell Q1 FY05 Results
Dell Q1 FY05 Results May 13, 2004 www.dell.com
Slide 2: Special Note
Special Note This presentation may contain forward-looking statements, including statements about the outlook and prospects for company and industry growth, as well as statements about the company’s future financial and operating performance. These and other statements that relate to future resu
Slide 3: Agenda
Agenda Introduction • Lynn A. Tyson, VP of IR Financial Results • Jim Schneider, SVP & CFO Strategic Direction • Kevin Rollins, President & COO Question & Answer Michael Dell, Kevin Rollins & Jim Schneider Close • Kevin Rollins, President & COO www.dell.com 3 Investor Relations
Slide 4: Q1 FY05 Highlights
Q1 FY05 Highlights Continued to execute on our strategic initiatives, leveraging the direct model to achieve consistent balanced growth in each of our businesses and regions. Growth significantly outpaced the market again in Q1 • Dell units up +25% Y/Y, 11% growth premium to the market • EMEA unit
Slide 5: Q1 FY05 Financial Highlights
Q1 FY05 Financial Highlights Delivered $0.28 EPS and $11.5 billion revenue * Repurchased 34 million shares of stock LIQUIDITY GROWTH • $1.0 billion in cash flow • Dell units up 25%; from operations mkt ex-Dell up 14% • $11.9 billion in cash • 21% Rev growth & investments • 22% EPS growth • CCC -
Slide 6: Q1 FY05 Product Summary
Q1 FY05 Product Summary #1 WW share position with 18.6% of the market Gained 1.7pts Y/Y and extended our #1 position to 3.1pts Revenue Unit Growth Growth Product Y/Y Q/Q Y/Y Q/Q Desktops 13% -3% 21% -3% Notebooks 24% 1% 39% 1% Enterprise 19% 2% 22% 4% TOTAL 21% Flat 25% -2% Source: Market info i
Slide 7: Q1 Product Performance: Servers & Storage
Q1 Product Performance: Servers & Storage Servers Q1 units up 24% WW market share +2.7 pts to 26% Fastest growth in the top ten WW US market share up +3.9 pts to 36%, extended #1 position PowerEdge 3250 Storage Dell|EMC revenue up 25% WW, 62% in EMEA • Continue to work closely with EMC to
Slide 8: Q1 Product Performance: Services & Client Systems
Q1 Product Performance: Services & Client Systems Services Enhanced services revenue up 41% • $3 billion run-rate Growth driven by: • Customer demand for standardizing services • Performance outside of the Americas exceeding 70% growth Dell Professional Services Client Systems Double digit Y/Y
Slide 9: Q1 Product Performance: Software & Peripherals
Q1 Product Performance: Software & Peripherals Software & Peripherals Axim X3i >$170 billion opportunity with no 4100MP global supplier Projector • Revenue up 39%; Revs up 47% outside of the Americas Provide customers the best choice of value and quality in all the Dell W1700 LCD TV products we
Slide 10: Q1 FY05 Region Summary
Q1 FY05 Region Summary Revenue Unit Revenue Op Inc Growth Growth REGION $ millions $ millions Y/Y Q/Q Y/Y Q/Q Americas 5,758 565 16% 3% 18% 2% Business Unit U.S. Consumer 1,738 96 18% -19% 22% -24% Total Americas 7,496 661 16% -3% 19% -7% EMEA 2,653 198 31% 4% 37% 5% APAC/Japan 1,391 107 31% 16% 38%
Slide 11: Q1 Geographic Expansion: Americas
Q1 Geographic Expansion: Americas Units up 19% • #1 share in U.S. in every customer segment • U.S. market share now 33% U.S. Corporate units up 14%, revenue up 13% in Q1 Revenue accelerating to >20% in Q2, highest growth rate in 14 quarters #1 in U.S. SMB with 22% share (gaining 3.2 pts Y/Y)
Slide 12: Q1 Geographic Expansion: Europe, Middle East & Africa
Q1 Geographic Expansion: Europe, Middle East & Africa Units up 37%; revenue up 31% • #2 in the market, share up over 3pts Q/Q to 13% • Operating profits up >40% Client revenue up 27%, S&P revenue up 50% Captured #1 position in UK with 28% share • Continued growth and share gains in France, Ger
Slide 13: Q1 Geographic Expansion: Combined Asia-Pacific/Japan
Q1 Geographic Expansion: Combined Asia-Pacific/Japan AP/Japan combined units up 38% • Revenue up 31%; Op income up 35% • Gained 1.7 pts share and shipped a record 1 million total units China units up 48% • Desktop and notebook units up nearly 50% • Server units up 39% APAC units up 51% • Gaine
Slide 14: Q2 FY05 Outlook
Q2 FY05 Outlook Strategy to drive for growth and profitable share gain in all segments, products & regions remains unchanged Unit shipments up 3% Q/Q, 24% Y/Y Will utilize the model to profitably gain market share while hitting revenue and earnings commitments. Revenue of approximately $11.7 b
Slide 15: Strategic Direction…
Strategic Direction… Initiatives support goals to drive strategic and profitable growth in new and existing profit pools Maintain the flexibility to react to changing market dynamics Plan to maximize revenue and share growth for a given EPS target Expect for component pricing to remain challen
Slide 16: Direct Model Continues to Create Customer Value Through Standardization
Direct Model Continues to Create Customer Value Through Standardization By partnering with companies, Dell is able to generate superior operating income per R&D dollar spent $10 Dell Opinc/R&D Leveraging industry Dollar technology to bring value to customers and decreases costs $5 Expanding Alli
Slide 17: Dell Model Produces an Immediate Impact in Printer Market Share
Dell Model Produces an Immediate Impact in Printer Market Share United States 40% Printers Now the Fastest Growing 35% Product Line in Dell History SERVERS Dell U. S. Market Share 30% 25% NOTEBOOKS AIO 20% Printers 15% 10% DESKTOPS 5% 0% Year 1 Year 10 Source: IDC -- Market Share Periods & Company E
Slide 18: Dell is Targeting the Largest Printer Profit Pools
Dell is Targeting the Largest Printer Profit Pools US Printer Market 100% Significant opportunities in the U.S., beginning to expand Large globally 80% Business & Public Launched in EMEA and Category Revenue/OpInc Australia – initial demand as % of Industry Total exceeding expectations 60% Pla
Slide 19: Consistent, Profitable Progress Outside the US
Consistent, Profitable Progress Outside the US 35% Dell Direct Model, First Twenty Years USA 30% Following Direct Launch Date 25% Dell Market Share CANADA United Kingdom 20% 15% FRANCE 10% JAPAN CHINA GERMANY 5% 0% Year 1 Year 10 Year 20 Source: IDC -- Market Share Periods & Company estimates www.de
Slide 20: Summary
Summary Model is structurally advantaged • Demonstrated that the model works in all environments • Provides the flexibility to drive for market share while achieving profitability targets Remain focused on growth opportunities • Continue to tap into accelerating growth in the enterprise via addi
Slide 21: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information www.dell.com