Avaya Inc

Avaya — Investor Presentation (May 2004)

16 slides from Avaya's investor presentation, May 3, 2004

  1. Slide 1: Focused on Execution

    Focused on Execution Garry McGuire Chief Financial Officer & SVP Corporate Development May 3, 2004 Copyright© 2003 Avaya Inc. All rights reserved

  2. Slide 2: Forward Looking Statement

    Forward Looking Statement The use of words, such as “may”, “might”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “intends”, “future”, “potential” or “continue”, the negative of these terms and other comparable terminology are intended to identify forward- looking sta

  3. Slide 3: Focused on Execution: Creating Value

    Focused on Execution Creating Value = 3

  4. Slide 4: Strategic Differentiation: Integrated Value Proposition

    Strategic Differentiation Integrated Value Proposition • Clear focus on the enterprise • Global services organization • Voice experience and expertise • Customer ROI • Significant installed base • Comprehensive applications portfolio Full life-cycle expertise Experience 4

  5. Slide 5: Strategic Differentiation: World-Class IP Telephony Technology

    Strategic Differentiation World-Class IP Telephony Technology Value Proposition Scalability Security & Reliability • Migration choices • 12K IP endpoints • Hardened Linux servers • Over 700 features per server • Advanced encryption • Investment • 300K busy hour • IP and TDM redundancy protection cal

  6. Slide 6: Technology Transition: Global IP Telephony Opportunity & Adoption Cycle

    Technology Transition Global IP Telephony Opportunity & Adoption Cycle Technology Proliferation 500 Business Model Transformation Technology Acceptance 400 Increasing Enterprise Productivity Global Enterprise Technology Adoption Telephony 300 Toll Bypass Savings Installed Base 200 (M) 27% of Global

  7. Slide 7: Global Leadership: Momentum in IP Telephony

    Global Leadership Momentum In IP Telephony Avaya Worldwide IP Telephony Market Share – 4Q CY03 50% Cisco Nortel 40% Alcatel Siemens Market Share 30% 20% 10% 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q CY00 CY01 CY02 CY03 Time Period Source: Synergy Research Group 7

  8. Slide 8: Global Leadership: Enterprise Telephony Mind Share

    Global Leadership Enterprise Telephony Mind Share North America EMEA Asia/Pacific Enterprise Telephony Enterprise Telephony Enterprise Telephony September, 2003 August, 2003 April, 2004 Challengers Leaders Challengers Challengers Leaders NEC Avaya Cisco Avaya Ability to Execute Cisco Ability to Exec

  9. Slide 9: Global Leadership: Leveraging Global Strength in Applications

    Global Leadership Leveraging Global Strength in Applications North America Call Center Western Europe Call Center Asia Pacific Call Center 47% 50% 50% 50% 40% 35% 40% 33% 40% 30% 24% 30% 30% 17% 20% 20% 20% 13% 12% 12% 7% 7% 7% 7% 6% 10% 5% 10% 10% 5% 0% 0% 0% Avaya Nortel Siemens Aspect Rockwell Av

  10. Slide 10: Recent Analyst Comments & Industry Awards

    Global Leadership Recent Analyst Comments & Industry Awards “Given a gradually improving macro environment, excellent Chose Avaya’s IP Telephony platform as Top Convergence Solution cash position (>$1B in net cash), and solid cost structure with March 2004 still considerable operating leverage, Avay

  11. Slide 11: Enhanced Business Model: Positioning For Growth

    Enhanced Business Model Positioning For Growth 2/2/04: Amended bank credit Q2 FY04: Successfully facility to enhance financial flexibility integrated Expanets 2/2/04: Completed sale of Connectivity to Commscope 2/12/04: Sold 14M common shares Clawback 3/19/04: Retired $224M of senior secured notes 4

  12. Slide 12: Enhanced Business Model: Positioning For Growth

    Enhanced Business Model Positioning For Growth 1,400 Revenue (Continuing Operations) 1,200 1,000 800 ($M) 600 1,172 1,137 1,055 1,023 1,006 946 950 929 971 971 400 200 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY02 FY02 FY02 FY02 FY03 FY03 FY03 FY03 FY04 FY04 12

  13. Slide 13: Enhanced Business Model: Operating Leverage

    Enhanced Business Model Operating Leverage 500 Gross Margin* ($M) 400 300 200 100 0 Q1 FY03 Q2 FY03 Q3 FY03 Q4 FY03 Q1 FY04 Q2 FY04 ($) 396 418 404 421 448 471 % 41.9% 44.0% 43.5% 43.4% 46.1% 46.8% 80 Operating Income (Loss)* ($M) 60 40 20 0 *Gross margin and operating income(loss) -20 in fiscal 200

  14. Slide 14: Enhanced Business Model: Financial Strength

    Enhanced Business Model Financial Strength 1,400 Cash 1,200 1,000 ($M) 800 1,516 600 1,192 1,044 400 843 651 724 597 200 0 9/30/02 12/31/023/31/03 6/30/03 9/30/0312/31/03 3/31/04 400 Net Cash* 300 200 787 100 239 90 ($M) 0 -100 -162 -150 * Net cash is defined as cash and cash equivalents -336 -283 l

  15. Slide 15: Summary

    Summary Today Tomorrow • Executing on our • Positioning for growth business plan • Pursuing profitable • Strategic vision and market share gains differentiation • Leveraging competitive • Global leadership advantages • Restructured and • Operating leverage refocused • Well positioned for the • Stren

  16. Slide 16: Focused on Execution

    Focused on Execution Garry McGuire Chief Financial Officer & SVP Corporate Development May 3, 2004 Copyright© 2003 Avaya Inc. All rights reserved

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