Dell Technologies Inc. · NYSE:DELL
Dell Technologies — Investor Day (September 2021)
71 slides from Dell Technologies's investor day presentation, Sep 23, 2021
Slide 1: Dell Technologies Securities Analyst Meeting
Dell Technologies Securities Analyst Meeting September 23, 2021 Exhibit 99.1
Slide 2: Kick Off
Kick Off Rob Williams, Senior Vice President, Investor Relations Securities Analyst Meeting September 23, 2021
Slide 3: Non-GAAP Financial Measures and Forward-Looking Statements
NON-GAAP FINANCIAL MEASURES This presentation includes information about non-GAAP revenue, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP cash flow from operations, non-GAAP income tax, non-GAAP net income, non-GAAP net income attributable to Dell Technologie
Slide 4: VMware transaction update
VMware transaction update Expect to close early Nov., Contingent upon closing conditions including favorable private letter ruling from IRS No change to the number of Dell basic shares outstanding Shareholders will have economic interest in Dell excluding VMware + $9.3B2 from VMware special dividend
Slide 5: Agenda
Dell Technologies Securities Analyst Meeting September 23, 2021 Company Vision Executing our Strategy Infrastructure Solutions Group Strategy Client Solutions Group Strategy Agenda Q&A Michael Dell Jeff Clarke and Chuck Whitten Jeff Boudreau Sam Burd Value Creation Framework Tom Sweet Dell Executive
Slide 6: Company vision
Company vision Michael Dell, Chairman and Chief Executive Officer Securities Analyst Meeting September 23, 2021
Slide 7: Dell Technologies evolution since 2013 go-private transaction
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Slide 8: Multi-cloud ecosystem
Multi-cloud ecosystem Dell Technologies sits at the center of the multi-cloud ecosystem Source: 1) Flexera 2021 State of the Cloud report; 2) Rightscale (Flexera) 2016 State of the Cloud report; 3) Dell Multi-Cloud Sprawl E-Book; Disclaimer: ESG Research Insights Paper “The Cloud Complexity Imperati
Slide 9: Extended Dell market: $650B growing 8% to 2024E
Extended Dell market: $650B growing 8% to 2024E overall_0_132673021202465803 columns_1_132673021202465803 8_1_132673021202465803 11_1_132673035250836306 Dell industry position $2T TAM growing GDP to GDP+ as digital transformation drives broad, sustained technology investment Core Dell market: $670B
Slide 10: Executing our strategy
Executing our strategy Jeff Clarke, Vice Chairman and Co-Chief Operating Officer Chuck Whitten, Co-Chief Operating Officer Securities Analyst Meeting September 23, 2021
Slide 11: Executing our strategy: Executive Summary
Executing our strategy Executive Summary Realizing our vision requires consolidating and modernizing the Core while building new growth businesses In our Core, we have leadership positions in IT infrastructure / PC markets and have a proven track record of taking share Our unique and durable competi
Slide 12: Dell Technologies strategy
Dell Technologies strategy Build new growth businesses where we have a unique right to win Edge Telecom Multi-Cloud Service Delivery Data Mgmt. Consolidate and modernize the Core business APEX Compute & Networking PC Storage #1 positions in CSG and ISG Largest GTM and Channel ecosystem Leading finan
Slide 13: Dell Technologies strategy
Dell Technologies strategy Build new growth businesses where we have a unique right to win Edge Telecom Multi-Cloud Service Delivery Data Mgmt. Consolidate and modernize the Core business APEX Compute & Networking PC Storage #1 positions in CSG and ISG Largest GTM and Channel ecosystem Leading finan
Slide 14: Dell Technologies industry position
Dell Technologies industry position Leadership positions in the Core infrastructure and PC markets overall_0_132648004933371496 columns_1_132648004664442179 4_0_132648004664442179 5_0_132648004664442179 26_1_132648004664442179 30_1_132648004664442179 58_0_132648004664442179 52_0_132648004664442179 5
Slide 15: Dell Technologies Core markets
Dell Technologies Core markets 24% 28% 28% Commercial PC unit share1 Mainstream Server revenue share2 External Storage revenue share3 We have leadership positions and room to grow Note: All market share figures based on trailing twelve-month calendar period Q3 2020-Q2 2021 Source: 1) IDC PCD Tracker
Slide 16: Dell competitive advantages
Tech’s largest direct go-to-market and channel ecosystem creates unparalleled market reach Leading global services footprint in technology to support complex customer needs, powered by modern, predictive software Industry-leading scale and differentiated supply chain enables cost position, speed, co
Slide 17: Dell Technologies strategy
Dell Technologies strategy Build new growth businesses where we have a unique right to win Edge Telecom Multi-Cloud Service Delivery Data Mgmt. Consolidate and modernize the Core business APEX Compute & Networking PC Storage #1 positions in CSG and ISG Largest GTM and Channel ecosystem Leading finan
Slide 18: Edge overview
Edge overview We have a trusted relationship with our customer base Our supply chain, manufacturing, and global support and delivery are unmatched Our partnership alliances span all leading OT vendors We work closely with the cloud providers to best address customer needs $110B 17% Market opportunit
Slide 19: Telecom overview
Telecom overview We are the largest provider of open, software-defined, industry standard infrastructure Dell’s engineering, supply chain, and services can anchor the emerging modern telecom ecosystem We have new integration and solutions development capabilities Our strategy and business model allo
Slide 20: Dell Technologies strategy
Dell Technologies strategy #1 positions in CSG and ISG Largest GTM and Channel ecosystem Leading financial services capabilities First & best VMware alliance Leading global services footprint Industry-leading scale and supply chain COMPETITIVE DIFFERENTIATORS E2E product and Multi-Cloud offerings Co
Slide 21: Infrastructure Solutions Group strategy
Infrastructure Solutions Group strategy Jeff Boudreau, President Securities Analyst Meeting September 23, 2021
Slide 22: ISG key takeaways
ISG key takeaways Executive Summary With our broad portfolio of #1s, innovation and support organizations, ISG is well-positioned for growth in storage, servers and adjacent opportunities Our Core TAM is large and growing and we have additional long-term upside in Telecom, Edge, data management and
Slide 23: Data is growing and becoming more distributed
Data is growing and becoming more distributed Data is growing exponentially1 92% of companies are already multi-cloud2 And more than 50% of new IT infrastructure will be deployed at the Edge by 20233 95% of Fortune 100 companies rely on Dell for their mission-critical IT Public cloud Colo Public clo
Slide 24: ISG market share and growing TAM
HCI 32% share4 overall_0_132665179221082036 columns_2_132665179221082036 46_1_132665179221082036 7_1_132673038341547081 3_1_132673050166662941 TAM is growing Note: Leading positions based on market share figures calculated on trailing twelve-month calendar period Q3 2020-Q2 2021 1) Dell analysis lev
Slide 25: Extending our leadership position in Storage
Extending our leadership position in Storage 1) IDC Quarterly Storage and Converged Systems Trackers 2021Q2; 2) IDC Quarterly Converged Systems and Enterprise Storage Systems Trackers – 2021Q1 Forecast 3) Rough approximation of market by IDC price band using 2020 data from IDC Quarterly Enterprise S
Slide 26: Extending our leadership position in Servers
Extending our leadership position in Servers Mainstream Server Innovation 15G Servers Adaptive compute Advanced automation with built-in security Proactive resilience to protect against cyber attacks Telecom Servers (XR11/XR12) Designed for compliance with the rigorous standards of the Telecom (NEBS
Slide 27: Multi-cloud ecosystem
Multi-cloud ecosystem Dell sits at the center of the multi-cloud ecosystem Of companies leverage multiple clouds today1 Clouds are used by businesses on average3 Of companies leverage hybrid cloud environments, up from 55% five years ago1,2 92% 82% Public cloud Colo Public cloud Private cloud Core D
Slide 28: Client Solutions Group strategy
Client Solutions Group strategy Sam Burd, President Securities Analyst Meeting September 23, 2021
Slide 29: CSG key takeaways
CSG key takeaways Executive Summary Overall PC industry has reset to a higher level, led by long-term growth of higher-value segments Our target PC segments represent the majority of revenue and profit growth historically and going forward Delivered consistent P&L growth led by our differentiated di
Slide 30: Overall PC industry has reset to a higher level
Overall PC industry has reset to a higher level Note: Premium Consumer includes units with ASP > $800; Mainstream Consumer includes units with ASP <= $800 Source: IDC Worldwide PC Tracker 2021 Q2 Final Historical and IDC Worldwide PC Tracker 2021 Q2 Forecast Unit Growth by Segment (2016-2024F) Growt
Slide 31: Not all PCs are created equal
Not all PCs are created equal Dell’s target segments drive majority of revenue and profit growth historically and going forward Chrome Mainstream Consumer PCs Premium Consumer PCs Commercial PCs Note: Premium Consumer includes units with ASP > $800; Mainstream Consumer includes units with ASP <= $80
Slide 32: CSG business delivers consistent P&L growth
CSG business delivers consistent P&L growth +7% CAGR FY18-FY21 +18% CAGR FY18-FY21 Source: 1) Client business results (CSG revenue and operating income) compared with other PC OEMs from financial public filings, excluding tablet revenue Operating Income Revenue Direct Customer Relationships Ongoing
Slide 33: PC is core platform to grow in $150B+ adjacent markets
PC is core platform to grow in $150B+ adjacent markets Services Support Deployment Managed Services/ End-point management Financing APEX/aaS Displays Docks Webcams Audio/ headsets Cables/ adapters Software & Peripherals Consulting Keyboards & Mice Software Cases We have a proven, strong attach motio
Slide 34: Value Creation Framework
Value Creation Framework Tom Sweet, Chief Financial Officer Securities Analyst Meeting September 23, 2021
Slide 35: Value creation and financial framework
Value creation and financial framework Executive Summary Track record of consistent growth, profitability and shareholder value creation Durable competitive advantages provide visibility, scale and service capabilities unmatched across our industry Adaptable and focused execution enables us to deliv
Slide 36: Our proven track record
Our proven track record… Consistent and stable growth, solid cash flow, and shareholder value creation Revenue growth > IT Spending excl’d Telecom2 N/A Revenue Opinc Core Debt and Other4 Diluted EPS 1) FY18-2Q22 TTM CAGR Total Dell Technologies; 2) 5% CAGR CY17-CY20 according to IDC Worldwide Black
Slide 37: We are adapting and delivering results in any market
We are adapting and delivering results in any market 7% Revenue CAGR1 and 12% Opinc CAGR1 delivered through various macro dynamics Leveraging durable competitive advantages & disciplined cost control: Industry’s largest direct sales team and customer intimacy provides ability to: Pivot into market o
Slide 38: Proven track record of performance at Core Dell
Proven track record of performance at Core Dell1 … Consistent, profitable growth over time and solid cash flow driven by execution in our CSG & ISG businesses 6% CAGR Revenue growth Growing at a premium to the market9 Over the last 5 years … ~540bps Commercial PC ~560bps Mainstream Server ~200bps Mi
Slide 39: Long-term value creation framework: revenue growth
Introducing long-term value creation framework Driving 3 - 4% base case Revenue growth compounded annually through FY26 Additional Opportunities and Risks Base Case Revenue Growth & Operational Drivers Dell Tech. CSG ISG 5-year Base Growth 2 - 3% CAGR1 5-year Base Growth 3 - 4% CAGR1 5-year Base Gro
Slide 40: Long-term value creation framework: EPS growth and FCF
Introducing long-term value creation framework Driving 6+% base case EPS growth compounded annually through FY26, and Adj. FCF > 1x Net Income Additional Opportunities and Risks Base Case and Operational Drivers Dell Tech. Diluted EPS Free Cash Flow Revenue and Opinc growth beyond base case Interest
Slide 41: Balanced approach to Capital Allocation
Balanced approach to Capital Allocation Target returning 40 - 60% of Adjusted FCF to shareholders… share repurchase & quarterly dividend What we have done to date: $25B1 debt paydown since EMC transaction ~95% FY18-FY21 FCF focused on debt paydown and goal to achieve investment grade across all thre
Slide 42: Committed to long-term value creation
Committed to long-term value creation Our track record of execution, competitive advantages and strategy have us well positioned Shareholder value delivered to date… Simplified Capital and Corporate Structure Sold non-Core assets VMW Spin De-leveraging … on track to achieve investment grade from all
Slide 43: Q&A
Q&A Michael Dell, Chairman and Chief Executive Officer Jeff Clarke, Vice Chairman and Co-Chief Operating Officer Chuck Whitten, Co-Chief Operating Officer Tom Sweet, Chief Financial Officer Jeff Boudreau, President, ISG Sam Burd, President, CSG
Slide 44: Appendix A: Consolidated GAAP and non-GAAP financial information
Appendix A Consolidated GAAP and non-GAAP financial information
Slide 45: Consolidated GAAP Results
1) Results include material adjustments related to purchase accounting and other items. For additional detail on these adjustments, please refer to accompanying supplemental slides in Appendix B.; 2) See accompanying supplemental slides for weighted average shares and EPS calculation. Consolidated G
Slide 46: Consolidated non-GAAP Results
Consolidated non-GAAP Results1 1) Please refer to accompanying supplemental slides for reconciliation of non-GAAP measures to GAAP; 2) See accompanying supplemental slides in Appendix B for weighted average shares and EPS calculation; 3) FY19 earnings per share – basic and earnings per share – dilut
Slide 47: Debt Summary
Debt Summary 1) Amounts are based on underlying data and may not visually foot due to rounding; 2) Principal Face Value; 3) Core Secured Debt represents secured term loans, investment grade notes, and revolver. It excludes DFS allocated debt based on a 7:1 leverage ratio of DFS financing receivables
Slide 48: Appendix B: Supplemental non-GAAP measures
Appendix B Supplemental non-GAAP measures
Slide 49: Supplemental non-GAAP measures: Revenue and Gross Margin
Supplemental non-GAAP measures Revenue and Gross Margin 1) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 2) Consists of impairment charges, incentive charges related to equity investments, severance, facilities action, and other costs.
Slide 50: Supplemental non-GAAP measures: SG&A, R&D and Operating Expense
Supplemental non-GAAP measures SG&A, R&D and Operating Expense 1) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 2) Consists of acquisition, integration, and divestiture-related costs; 3) Consists of impairment charges, incentive charge
Slide 51: Supplemental non-GAAP measures: Operating Income
Supplemental non-GAAP measures Operating Income 1) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 2) Consists of acquisition, integration, and divestiture-related costs; 3) Consists of impairment charges, incentive charges related to eq
Slide 52: Supplemental non-GAAP measures: Interest and Other, Net
Supplemental non-GAAP measures Interest and Other, Net 1) Primarily consists of the fair value adjustments on strategic equity investments as well as a gain on the sale of RSA Security in FY21.
Slide 53: Supplemental non-GAAP measures: Net Income
Supplemental non-GAAP measures 1) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 2) Consists of acquisition, integration, and divestiture-related costs and gains; 3) Consists of impairment charges, incentive charges related to equity in
Slide 54: Supplemental non-GAAP measures: Non-controlling interests
Supplemental non-GAAP measures 1) Amortization of intangibles reflects Dell Technologies Inc. basis; 2) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 3) Consists of acquisition, integration and divestiture-related costs; 4) Consists of
Slide 55: Supplemental non-GAAP measures: Net Income attributable to Dell
Supplemental non-GAAP measures 1) This amount includes non-cash purchase accounting adjustments primarily related to the EMC merger transaction; 2) Consists of acquisition, integration and divestiture-related costs; 3) Consists of impairment charges, incentive charges related to equity investments,
Slide 56: Supplemental non-GAAP measures: Earnings per Share
Supplemental non-GAAP measures 1) The incremental dilution from VMware, Inc. attributable to Dell Technologies represents the impact of VMware, Inc.’s dilutive securities on diluted earnings per share of Dell Technologies common stock, and is calculated by multiplying the difference between VMware,
Slide 57: Supplemental non-GAAP measures: Revenue and Operating Income
Supplemental non-GAAP measures 1) Represents Dell Technologies non-GAAP net revenue, excluding VMware, adjusted to include the impact of currently estimated VMware reseller revenue; 2) This amount includes non-cash purchase accounting adjustments related to the EMC merger transaction and the going-p
Slide 58: Supplemental non-GAAP measures: Estimated Adjusted Free Cash Flow
Supplemental non-GAAP measures 1) Amounts are based on underlying data and may not visually foot due to rounding; 2) Amount represents change in net carrying value of equipment for DFS operating leases; 3) Estimated adjusted free cash flow represents historical adjusted free cash flow excluding VMwa
Slide 59: Appendix C: Management estimated pro forma financial measures
Appendix C Management estimated pro forma financial measures
Slide 60: Management estimated pro forma financial measures
Management estimated pro forma financial measures1,2 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and include adjustments for discontinued op
Slide 61: Management estimated pro forma financial measures
Management estimated pro forma financial measures1,2 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and include adjustments for discontinued op
Slide 62: Non-GAAP management estimated pro forma financial measures
Non-GAAP management estimated pro forma financial measures1,2 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and include adjustments for discon
Slide 63: Non-GAAP management estimated pro forma financial measures
1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and include adjustments for discontinued operations related to VMware and material nonrecurring
Slide 64: Appendix D: Supplemental management estimated pro forma non-GAAP measures
Appendix D Supplemental management estimated pro forma non-GAAP measures
Slide 65: Pro forma revenue and gross margin
Supplemental pro forma non-GAAP measures1 Management estimated pro forma revenue and gross margin 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal yea
Slide 66: Pro forma SG&A, R&D and operating expense
Supplemental pro forma non-GAAP measures1 Management estimated pro forma SG&A, R&D and operating expense 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fis
Slide 67: Pro forma operating income
Supplemental pro forma non-GAAP measures1 Management estimated pro forma operating income 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and in
Slide 68: Pro forma interest and other, net
Supplemental pro forma non-GAAP measures1 Management estimated pro forma interest and other, net 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year
Slide 69: Pro forma net income
Supplemental pro forma non-GAAP measures1 Management estimated pro forma net income 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of each fiscal year and include
Slide 70: Pro forma net income attributable to Dell Technologies Inc.
Supplemental pro forma non-GAAP measures1 Management estimated pro forma net income attributable to Dell Technologies Inc. 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beg
Slide 71: Pro forma earnings per share - basic and diluted
Supplemental pro forma non-GAAP measures1 Management estimated pro forma earnings per share - basic and diluted 1) Represents current estimated management pro forma financial measures. Pro forma financial statements are computed assuming the VMware spin-off transaction occurred at the beginning of e