Dell Technologies Inc. · NYSE:DELL
Dell Technologies — Q3 FY2006 Earnings Presentation
20 slides from Dell Technologies's earnings presentation, Nov 10, 2005
Slide 1: Dell Q3 FY06 Results
Dell Q3 FY06 Results November 10, 2005
Slide 2: Special Note
Special Note Statements in this presentation and the accompanying press release and conference call that relate to future results and events (including statements about Dell’s anticipated financial and operating performance) are forward-looking statements based on Dell’s current expectations. Ac
Slide 3: Q3 FY06 Overview
Q3 FY06 Overview Pleased Pleased with with our our ability ability to to deliver deliver industry industry leading leading profitability, profitability, consistent consistent growth growth in in earnings earnings and and aa balanced balanced P&LP&L • Record Non-GAAP EPS of $0.39 1 , an increase of 1
Slide 4: Q3 FY06 GAAP to Non-GAAP Bridge
Q3 FY06 GAAP to Non-GAAP Bridge Non-GAAP GAAP Charges1 Non-GAAP Gross Profit $ 2,251 $ 338 $ 2,589 Gross Margin 16.2% 18.6% Operating Expenses 1,497 (104) 1,393 % of Revenue 10.8% 10.0% Operating Income 754 442 1,196 Operating Margin 5.4% 8.6% Income Tax 198 104 302 Effective Tax Rate 24.6% 24.2% Ne
Slide 5: Q3 FY06 Financial Highlights
Q3 FY06 Financial Highlights Delivered Delivered record record $0.39 $0.39 EPS EPS and and $13.9 $13.9 billion billion revenue revenue Spent Spent $1.4B $1.4B to to repurchase repurchase 41 41 million million shares shares LIQUIDITY GROWTH • $1.1 billion cash flow • Units up 15% from operation
Slide 6: Free Cash Flow Per Share
Free Cash Flow Free Cash Flow & EPS Trends $2.00 FCF • Strong cash flows EPS ¾ CFOps of $1.1B $1.50 Trend FCF Trend EPS Trend Linear (EPS) ¾ FCF of over $1.0B Per Share $1.00 ¾ CFOps/share of $0.47 & FCF/share of $0.41 • Strategy is to consistently grow $0.50 EPS and FCF/share faster than Revenue $0
Slide 7: Share Repurchase
Share Repurchase Share Buyback • Spent $1.4 billion to $10 2,650 repurchase 41 million shares $9 2,600 • YTD have repurchased 138 Cumulative Share Repurchase $8 million shares Diluted Shares (M) $7 WAS Since Q1 FY05 ($B) 2,550 $6 ¾More than 3x the stock options we expect to grant Share Repurchase $5
Slide 8: Q3 Product Summary
Q3 Product Summary Revenue Revenue Growth Unit Growth Product $B Y/Y Q/Q Y/Y Q/Q Desktop PCs 5.1 -2% 2% 6% -2% Mobility 3.6 14% 4% 38% 7% Servers 1.4 16% 4% 21% -2% Storage 0.5 35% 11% Enhanced Services 1.2 36% 7% S&P 2.1 25% 4% TOTAL $13.9 11% 4% 15% 1% “Desktop PCs” PCs” includes desktops and desk
Slide 9: Q3 Product Summary: Servers & Storage
Q3 Product Summary: Servers & Storage PowerEdge 6800 & 6850 Servers and Networking • Revenue of $1.4 billion, up 16% Quad-socket servers -- featuring • Unit growth of 21% - 2X the rest of dual-core the industry Intel Xeon processors ¾ Gained 3 points of share in the U.S. extending lead over #2 vendo
Slide 10: Q3 Product Summary: Enhanced Services
Q3 Product Summary: Enhanced Services Deferred Services Revenue • Enhanced services revenue up Balance ($B) 36% to $1.2 billion $3.5 $3.0 ¾Grew over 70% outside of the Americas $2.5 • Deferred revenue balance up 40% CAGR $2.0 $200M sequentially to $3.4B $1.5 • Recent recognition $1.0 $0.5 ¾Received
Slide 11: Q3 Product Summary: Software & Peripherals
Q3 Product Summary: Software & Peripherals S&P S&Prevenue revenueof of$2.1 $2.1billion, billion,up up25% 25%driven drivenby bydigital digital displays displaysand andimaging imaging Imaging and Printing • Total imaging and printing revenues up 31% 1710n Laser Printer • Greater emphasis on AIO inkjet
Slide 12: Q3 Product Summary: Mobility
Q3 Product Summary: Mobility Mobility • Revenue of $3.6 billion, up 14% on unit growth of 38% • First major computer supplier to announce multiple wireless carrier partnerships focused on integrated broadband capability • New XPS high performance notebooks • #1 in Worldwide and U.S. Notebook share •
Slide 13: Q3 Product Summary: Desktop PCs
Q3 Product Summary: Desktop PCs Desktop PCs • Revenue of $5.1 billion, down 2% on unit growth of 6% • Continue to see shift to mobility products • Refreshed XPS luxury line of high performance computers • #1 in Worldwide and U.S. share • Added multi core Xeon® technology to Precision Workstations •
Slide 14: Q3 Regional Summary
Q3 Regional Summary Revenue Op Inc Revenue Op Inc Growth Growth REGION $M $M Y/Y Q/Q Y/Y Q/Q Americas Business Unit 7,324 817 10% 2% 18% 7% U.S. Consumer 1,901 80 -2% 12% -17% -18% Total Americas 9,225 897 8% 4% 14% 4% EMEA 3,098 181 19% 6% -5% -5% APAC/Japan 1,588 118 20% -3% 0% -4% TOTAL 13,911 1,
Slide 15: Q3 Geographic Expansion
Q3 Geographic Expansion • Revenue growth of 20% outside of the US ¾ Contributed 40% of total revenues Revenue Outside of the • Europe, Middle East & Africa United States 42% ¾ Excluding the U.K., revenues were up 25%, led by France, Germany and U.K. home and 40% small business 38% ¾ Nearly 50% reven
Slide 16: Q4 FY06 Outlook
Q4 FY06 Outlook • Revenue of $14.6 - $15.0 billion; up 9-11% Y/Y • Expect margins in Q4 to contract modestly from Q3 driven by a seasonal increase in consumer and investments in our customer experience initiatives • Investment and other income of about $60 million • Tax rate of 24.25% • Share repurc
Slide 17: Executional Excellence
Executional Excellence • Dell model is known for driving executional excellence and we are keenly focused on that in this quarter and for the future • After Q2, began making changes to balance product and pricing model ¾ Implemented improvements to increase efficiency & drive lower Opex ¾ Implemente
Slide 18: Model is Advantaged
Model is Advantaged • Cost advantaged at all price points and in all products • Driving a better balance that optimizes profit while providing sustainable top line growth • Focused on driving product and operating cost reductions • Reinvigorating growth in the premium space while capturing market an
Slide 19: Accessibility of Technology
Accessibility of Technology • Dell model optimized to bring the most relevant technology to our customer in the most efficient manner • Excited by several technology and product advancements coming in the next 12 months ¾ 9th Gen servers featuring dual core processors, fully buffered DIMM memory and
Slide 20: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information