Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Q3 2012 Earnings Presentation
30 slides from Unisys Corporation New's earnings presentation, Oct 23, 2012
Slide 1: Third-Quarter 2012 Financial Results
Third-Quarter 2012 Financial Results October 23, 2012 www.unisys.com/investor Ed Coleman Janet Haugen Chairman & CEO Chief Financial Officer
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 assumption
Slide 3: Ed Coleman, Chairman & CEO
Ed Coleman Chairman & CEO ae —
Slide 4: 3Q12 Overview
3Q12 Overview • Results impacted by: – Weaker demand for short-term project services – Continued softness in U.S. Federal business – Higher pension expense, debt reduction charges • Revenue down 14%, 10% in constant currency • Services order signings were flat on constant currency basis • Reported $
Slide 5: 3Q12 Points of Continued Progress
3Q12 Points of Continued Progress • Grew international revenue in constant currency • Continued good cost discipline across the company • Strong margin performance in technology business • Enhanced reputation and new wins in end-user outsourcing El Dorado & Chengdu Airports • Innovative systems inte
Slide 6: Focused on Driving Profitable Revenue Growth
Focused on Driving Profitable Revenue Growth • Solid, growing pipeline of opportunities • Encouraged by reception for Los Angeles Leader Project recently announced offerings Best Fit Integrator Award from the Center for Digital Government • New high-end ClearPath models leveraging Intel® Xeon® proce
Slide 7: Unisys – Delivering a Safer and More Secure Connected World
Unisys – Delivering a Safer and More Secure Connected World Growth Opportunities Our Areas of Strength How We Compete Through Disruptive IT Trends Security • Differentiate with our expertise in delivering mission critical IT solutions and services. • Ongoing differentiation from the Data Center qual
Slide 8: Janet Haugen, SVP & CFO
Janet Haugen SVP & CFO ee
Slide 9: Financial Results
Financial Results $M (excluding EPS) 3Q12 3Q11 Y/Y Ch YTD12 YTD11 Y/Y Ch Revenue $877 $1,020 (14%) $2,727 $2,869 (5%) Gross Profit $219 $285 (23%) $688 $707 (3%) Gross Profit Margin 24.9% 27.9% (3.0 pts) 25.2% 24.6% 0.6 pts Operating Expenses (SG&A plus R&D) $157 $172 (8%) $483 $504 (4%) Operating P
Slide 10: Operating Profit
Operating Profit % of $M Trailing Twelve Months Operating Profit Revenue $500 25.0% 441 411 411 397 398 $400 373 376 378 20.0% 375 373 359 366 363 359 366 347 330 352 338 317 325 326 306 301 $300 15.0% $200 10.0% 140 107 $100 5.0% 52 9 $0 0.0% -3 -45 -$100 -5.0% 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q
Slide 11: Segment Revenue
Segment Revenue 3Q12 Year-to-Date 2012 • Services revenue down 15% Y/Y • Services revenue down 5% Y/Y – Services revenue declined 10% – Services revenue declined 2% in constant currency in constant currency – Excluding U.S. Federal, – Excluding U.S. Federal, Services revenue declined 13%; Services r
Slide 12: Services Revenue by Portfolio
Services Revenue by Portfolio Services Revenue $M 3Q12 Y/Y Ch YTD12 Y/Y Ch 100% Services Revenue $748 (15%) $2,387 (5%) 9% 7% BPO 6% Gross Margin 19.9% (170 bp) 19.9% -- 6% 14% 14% Core Operating Margin 6.0% (270 bp) 6.3% (40 bp) 75% ISS Revenue by Portfolio 3Q12 Y/Y Ch YTD12 Y/Y Ch 38% Systems Inte
Slide 13: Technology Revenue by Portfolio
Technology Revenue by Portfolio Technology Revenue $M 3Q12 Y/Y Ch YTD12 Y/Y Ch 100% 5% Other Technology 14% Technology $129 (10%) $340 (3%) Revenue Gross Margin 59.9% 250 bp 61.8% 870 bp 75% Enterprise Class Software & Operating Margin 29.1% 330 bp 27.8% 1320 bp Servers 50% 95% Revenue by 3Q12 Y/Y C
Slide 14: Unisys Revenue Profile
Unisys Revenue Profile Geography Latin 3Q12 YTD12 America Y/Y Y/Y 12% Asia North Pacific America North America (23%) (7%) Excluding U.S. Federal (20%) 4% 17% 41% Europe/ Europe/Africa (16%) (5%) Africa 30% Asia Pacific 19% 12% U.S. Federal Latin America (7%) (15%) 15% 3Q12 YTD12 Industry Y/Y Y/Y Fin
Slide 15: U.S. Federal Government Business
U.S. Federal Government Business $M Federal Revenue 3Q12 Business Mix $250 Defense & $200 Intelligence $181 23% $162 $157 $152 Civilian $150 Homeland 50% $125 $121 $129 Security 27% $100 $50 Revenue Y/Y 3Q12 (29%) $0 YTD 2012 (23%) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 © 2012 Unisys Corporation. All ri
Slide 16: 3Q12 Services Order Highlights
3Q12 Services Order Highlights • Services order signings declined Y/Y but were flat on a constant currency basis • Services orders by geography: – Orders rose Y/Y in Asia Pacific and Latin America – Orders declined Y/Y in North America and Europe • Services orders by portfolio: – ITO and Infrastruct
Slide 17: Cash Flow Comparison
Cash Flow Comparison $M 3Q12 3Q11 YTD12 YTD11 Cash Flow From Operations $17 $94 $107 $158 Capital Expenditures ($32) ($29) ($97) ($101) Free Cash Flow* ($15) $65 $11 $57 Pension Funding $56 $21 $175 $64 Free Cash Flow Before Pension Funding* $42 $86 $186 $120 Depreciation & Amortization $40 $47 $128
Slide 18: Reducing Leverage
Reducing Leverage $M Long-Term Debt (LTD) AR Securitization\Revolver Cash Net Cash* $1,500 $1,250 $1,000 $750 $500 $250 $0 -$250 -$500 -$750 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 *Net Cash = Cash less LTD and utilization under AR securitization\revolver faci
Slide 19: Questions & Answers
Questions & Answers
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company also discusses, in its earnings press release and/or earnings presentation materials, the following
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Free Cash Flow – To better understand the trends in our business, we believe that it is helpful to present free cash flow, which we define as cash flow from operations less capital expenditures. Management believes this measure gives investors an additional perspective on
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Cash (Debt) – In an effort to help investors better understand the debt held by the company, this measure takes into account not only the total debt obligations of the company, but the significance of debt compared to its cash balances. Net Cash (Debt) is calculated b
Slide 23: Schedule A: Non-GAAP Diluted Earnings (Loss) per Share
Schedule A: GAAP to Non-GAAP Reconciliation Non-GAAP Diluted Earnings (Loss) per Share $M except share and per share data 3Q12 3Q11 GAAP net income (loss) attributable to Unisys Corporation common shareholders ($12.4) $78.6 Debt reduction charge, net of tax 23.1 0.1 Pension expense, net of tax 28.9
Slide 24: Schedule B: Free Cash Flow
Schedule B: GAAP to Non-GAAP Reconciliation Free Cash Flow $M 3Q12 3Q11 YTD12 YTD11 Cash Provided by Operations $16.9 $93.8 $107.4 $157.7 Capital Expenditures (31.5) (28.8) (96.7) (101.1) Free Cash Flow ($14.6) $65.0 $10.7 $56.6 Pension Funding 56.3 20.8 175.1 63.6 Free Cash Flow Before Pension Fund
Slide 25: Schedule C: Non-GAAP Diluted Earnings (Loss) per Share
Schedule C: GAAP to Non-GAAP Reconciliation Non-GAAP Diluted Earnings (Loss) per Share $M except share and per share data YTD12 YTD11 GAAP net income (loss) attributable to Unisys Corporation common shareholders $47.6 $26.2 Debt reduction charges, net of tax 30.6 77.6 Brazil non-income tax case, net
Slide 26: Schedule D: Trailing Twelve Months Operating Profit Excluding Pension
Schedule D: GAAP to Non-GAAP Reconciliation Trailing Twelve Months Operating Profit Excluding Pension $M 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Reported Revenue 1,269.3 1,242.3 1,213.0 1,043.8 1,076.9 1,106.4 1,158.6 977.4 1,037.0 960.6 1,044.6 911.
Slide 27: Schedule E: EBITDA and Adjusted EBITDA
Schedule E: GAAP to Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Earnings before Interest, Taxes, Depreciation and Amortization $M 3Q12 3Q11 YTD12 YTD11 Net Income Attributable to Unisys ($8.4) $82.7 $59.7 $35.7 Interest Expense 7.8 12.5 25.0 51.7 Income Tax Provision 32.7 33.4 76.8 52.4 Depre
Slide 28: Schedule F: Net Cash (Debt)
Schedule F: GAAP to Non-GAAP Reconciliation Net Cash (Debt) $M 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Long-Term Debt (Including 1,060.6 1,060.3 1,061.2 911.0 911.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 210.8 Current Maturities) AR Securi
Slide 29: Schedule G: Non-GAAP Pretax Income
Schedule G: GAAP to Non-GAAP Reconciliation Non-GAAP Pretax Income $M 3Q12 3Q11 YTD12 YTD11 Pretax Income $27.6 $117.1 $144.7 $94.7 Debt Reduction 23.1 0.1 30.6 77.6 Pension Expense 29.9 8.5 76.7 26.2 Brazil Tax Matter -- -- -- 13.5 Non-GAAP Pre-tax Income $80.6 $125.7 $252.0 $212.0 © 2012 Unisys Co
Slide 30: Thank You
Thank You www.unisys.com/investor © 2012 Unisys Corporation. All rights reserved. 30