Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q3 2004 Earnings Presentation
22 slides from Unisys Corporation New's earnings presentation, Oct 14, 2004
Slide 1: 3Q 2004 Financial Release
3Q 2004 Financial Release October 14, 2004 Larry Weinbach Joe McGrath Janet Haugen Jack McHale CEO COO CFO IRO
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 assumptions
Slide 3: Introduction and Overview
Introduction and Overview Larry Weinbach Chairman & CEO
Slide 4: 3Q Highlights
Slide 1 3Q Highlights Achieved revenue and earnings guidance Strong double-digit order growth • Driven by outsourcing, infrastructure services Improved sales activity in enterprise servers • Strong double digit growth in ES7000 sales
Slide 5: 3Q04 Bridge to Earnings Guidance
Slide 2 3Q04 Bridge to Earnings Guidance Pension $ in Millions Charge/Tax As Reported Accounting except EPS Benefit Impact Net Income $25.2 $15.9 ($8.2) $32.9 EPS $.07 $.05 ($.02) $.10
Slide 6: Actions to Accelerate Profitable Growth
Slide 3 Actions to Accelerate Profitable Growth External: Enhance sales and marketing activities to maximize client exposure to “One Unisys” Revenue Operating Margin Leverage Costs Internal: Improve administrative efficiency & cost-effectiveness
Slide 7: Operational Review
Operational Review Joe McGrath President & Chief Operating Officer
Slide 8: Accelerating Profitable Growth
Slide 4 Accelerating Profitable Growth Productive quarter for new growth initiatives Based on review of business, Unisys management team identified areas to accelerate profitable growth External, client-facing activities: Enhance sales/marketing of full “one Unisys” portfolio Internal activities: Im
Slide 9: External, Client-Facing Actions
Slide 5 External, Client-Facing Actions 1. Dedicating greater focus/resources on large, selected global accounts 2. Prioritizing go-to-market efforts to focus resources on growth areas, increase win rates and deal profitability 3. Focusing resources in international marketing efforts 4. Increased fo
Slide 10: 3Q04 Major Orders
Slide 6 3Q04 Major Orders Department of Defense Implementation and $31M base year … – electronic medical training services potential value of records $130M over 4 years Leading Infrastructure 4-year, $47 million biotechnology outsourcing firm Comcast Expansion of Multi-year, $25 million remittance p
Slide 11: Cost Reduction Actions
Slide 7 Cost Reduction Actions 1. Streamlining physical facilities – expanded use of hoteling, virtual offices for mobile employees 2. Expanding use of lower-cost processes/operations – global sourcing centers, India, Bismarck (U.S.) shared service center 3. Expanding use of outsourcing – using thir
Slide 12: Actions to Accelerate Profitable Growth
Slide 8 Actions to Accelerate Profitable Growth External: Enhance sales and marketing activities to maximize client exposure to “One Unisys” Revenue Operating Margin Leverage Costs Internal: Improve administrative efficiency & cost-effectiveness
Slide 13: Financial Review
Financial Review Janet Haugen Chief Financial Officer
Slide 14: 3Q04 Revenue by Business Segment
Slide 9 3Q04 Revenue by Business Segment Revenue: $1,446 Million 3Q04 % Change Customer Services Revenue vs. 3Q03 79% Services $1,147M +2% Technology $299M -8% Overall $1,446M Flat Technology 21%
Slide 15: 3Q04 Services Revenue Breakdown
Slide 10 3Q04 Services Revenue Breakdown Customer Revenue: $1,147 Million 3Q04 Core Customer % Change Maint. vs. 3Q03 Revenue 12% Consulting/ Consulting/SI $403M +6% Infrastr. Systems Int. Services 35% Outsourcing $412M +4% 17% Infrastructure $193M -7% Services Core $139M -2% Outsourcing Maintenance
Slide 16: 3Q04 Technology Revenue Breakdown
Slide 11 3Q04 Technology Revenue Breakdown Customer Revenue: $299 Million 3Q04 % Change Customer Specialized vs. 3Q03 Revenue Technology Enterprise 16% $250M Flat Servers Enterprise Specialized $49M -35% Technology Servers 84% Overall $299M -8%
Slide 17: 3Q04 P&L Impacts
Slide 12 3Q04 P&L Impacts 3Q04 3Q04 3Q04 Charge 3Q03 3Q03 as Excl. for Cost as Excl. Reported Pension Reduction Reported Pension (GAAP) Actions* (GAAP) Revenue $1,445. 7M $1,445.7M $1,449.7M $1,449.7M Gross Margin $341.0M $358.1M $28.1M $425.1M $423.4M % of Revenue 23.6% 24.8% 1.9% 29.3% 29.2% SG&A
Slide 18: 3Q04 Services Operating Margins
Slide 13 3Q04 Services Operating Margins Pension Accounting Impact Reported (GAAP) Excluding Pension Accounting 5% 5% 4% 4% 3.9% 3% 3% 3.5% 2% 2% 1% 1% 1.6% -0.2% 0% 0% -1% -1% 3Q03 3Q04 3Q03 3Q04 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Invest
Slide 19: 3Q04 Technology Operating Margins
Slide 14 3Q04 Technology Operating Margins Pension Accounting Impact Reported (GAAP) Excluding Pension Accounting 18% 18% 16.5% 15.3% 12% 14.7% 12% 13.9% 6% 6% 0% 0% 3Q03 3Q04 3Q03 3Q04 Please refer to reconciliation of GAAP to non-GAAP financial information available on the Unisys Investor Web at w
Slide 20: 3Q04 Cash Flow Highlights
Slide 15 3Q04 Cash Flow Highlights 3Q04 3Q03 Cash Flow (Usage) From Operations ($1M) $114M Capital Expenditures $77M $98M % Revenue-Generating Cap Ex 75% 73% Free Cash Flow / (Usage) ($78M) $16M Depreciation & Amortization $92M $82M
Slide 21: Financial Outlook
Slide 16 Financial Outlook Look to close out 2004 with strong earnings in 4Q Reaffirm previous earnings guidance for full year 2004: • EPS excluding pension accounting in the 68 to 72 cents range • Flat to low single-digit revenue growth from prior-year levels Please refer to reconciliation of GAAP
Slide 22: Questions & Answers
ion Answer Consulting. Systems Integration Outsourcing. infrastructure. Vviviviv UNISYS infrastructure. Imagine ite Done