Slide 1: Dell Q3 FY05 Results
Dell Q3 FY05 Results November 11, 2004 www.dell.com
Slide 2: Special Note
www.dell.com Special Note This presentation may contain forward-looking statements, including statements about the outlook and prospects for company and industry growth, as well as statements about the company’s future financial and operating performance. These and other statements that relate t
Slide 3: Agenda
www.dell.com Agenda Introduction • Lynn A. Tyson, VP of IR and Corporate Communications Financial Results • Jim Schneider, SVP & CFO Strategic Direction • Kevin Rollins, President & CEO Question & Answer Michael Dell, Kevin Rollins & Jim Schneider Close • Kevin Rollins, CEO 3 Investor Re
Slide 4: Q3 FY05 Highlights
www.dell.com Q3 FY05 Highlights Delivered enhanced profitability and record performance across the business 18.1 percent market share -- Extended #1 WW position by 1.2 points Y/Y Company records across a broad range of metrics • Revenue of $12.5 billion on 18% growth • 8 million units shipped –
Slide 5: Q3 FY05 Financial Highlights
www.dell.com Q3 FY05 Financial Highlights Delivered $0.33 EPS* and $12.5 billion revenue* Spent record $1.3B* to repurchase 38 million shares* LIQUIDITY GROWTH • $1.8 billion Cash flow • Dell units up 22%; from operations* mkt ex-Dell up 10.5% • $12.4 billion in cash • 18% Rev growth & investmen
Slide 6: Q3 FY05 Product Summary
www.dell.com Q3 FY05 Product Summary Total Units up 22% Y/Y – 11 point growth premium to rest of market In the enterprise, Dell | EMC revenues up 31%; Server Units up 19% Strong demand for 8G servers and mid-range storage exiting the quarter – anticipate healthy growth in Q4 Unit Revenue Growt
Slide 7: Product Performance: Servers & Storage
www.dell.com Q3 Product Performance: Servers & Storage Servers Q3 units up 19%; Closed the gap with the category leader by 2.3 points #1 in US market share, up +1.5 pts Y/Y to 32.7% Continued Growth Internationally • APJ units up 27% Product Introductions PowerEdge SC1425, SC1420, SC420 • Po
Slide 8: Product Performance: Client Systems
www.dell.com Q3 Product Performance: Client Systems Notebooks • Units up 35% – Expanded #1 share position by 2.8 points. • Launched Inspiron 9200, 17-inch wide- aspect display • Inspiron 700m earned Laptop Magazine’s Latitude D600 Inspiron 9200 Best Buy award for design, performance and value De
Slide 9: Product Performance: Enhanced Services
www.dell.com Q3 Product Performance: Enhanced Services Q3 Results Enhanced services revenue up 32% Europe and Asia combined grew nearly 60% Managed Services showed strong growth • Revenue up 47% Dell Enhanced Services • Agreement with Honeywell increased seats under management to 1.5 million •
Slide 10: Product Performance: Software & Peripherals
www.dell.com Q3 Product Performance: Software & Peripherals Q3 Highlights WW Revenues up 37% DJ MP3 Players Axim X50 • >30% growth in all regions Total displays revenue up 38% Product Launches • 42-inch Plasma display for UltraSharp 2005FPW W2300 LCD TV under $2,300 • 26” and 19” LCD TVs • Ref
Slide 11: Product Performance: Printers
www.dell.com Q3 Product Performance: Printers Total units nearly doubled Color Lasers sequentially on improving profitability Lasers • Launched color lasers • Dell 5100cn was named Editor’s Choice by an independent tester 3000cn 3100cn 5100cn Consumer • Expect US inkjet share to be up 5 to 6 p
Slide 12: Q3 FY05 Region Summary
www.dell.com Q3 FY05 Region Summary Revenue Op Inc Unit Revenue Op Inc Growth Growth Growth REGION $M $M Y/Y Q/Q Y/Y Q/Q Y/Y Q/Q Americas 6,644 689 14% 4% 19% 7% 20% 3% Business Unit U.S. 1,937 97 14% 24% -1% 11% 15% 31% Consumer Total 8,581 786 14% 8% 16% 8% 18% 9% Americas EMEA 2,596 191 27% 7% 21
Slide 13: Geographic Performance: Americas
www.dell.com Q3 Geographic Performance: Americas US Units up 17%, 3.7 times the rate of the rest of the market • #1 share in U.S. in every customer segment 3 quarters in a row • Gained over 3 points of share in SMB • U.S. market share up almost 2 points Y/Y to 32.8% Profitable growth in Americas
Slide 14: Geographic Expansion: Europe, Middle East & Africa
www.dell.com Q3 Geographic Expansion: Europe, Middle East & Africa Units grew 31%, 15 points faster than the rest of the market Revenues up 27% Strong growth in all product segments • Server shipments up 24% • Continue to gain share Y/Y in client products Total Region market share increased
Slide 15: Geographic Expansion: Asia-Pacific and Japan
www.dell.com Q3 Geographic Expansion: Asia-Pacific and Japan AP/Japan units up 25% (almost 3X the rest of the market) • Added 1.1 points of share Y/Y to reach 8.2% of the market; now less than 1.5 points from the market leader • Total revenues up 24% • Operating margins up 200 basis points • Serve
Slide 16: Q4 FY05 Outlook
www.dell.com Q4 FY05 Outlook Revenue of $13.5 billion; up 8% Q/Q and 17% Y/Y Unit shipments should be up about 13% Q/Q, 20% Y/Y Increased US consumer mix and infrastructure investments will keep operating margins flat in Q4 Investment and other income of $50 million Tax rate of 26% for Q4
Slide 17: Structural Advantages and Consistency in Q3
www.dell.com Structural Advantages and Consistency in Q3 15th consecutive quarter of meeting or exceeding our guidance to investors Balanced growth and profitability – with operating profits and EPS growing faster than revenue in Q3 • Operating margin at highest level in four years • Revenue at
Slide 18: IT Spending Environment
www.dell.com IT Spending Environment Strength in core segments and new markets drives differentiated performance Business IT spending has steadily and consistently improved since the end of last year Q3 demand from small, medium and large corporate business continued to grow – revenues up 20%
Slide 19: Evolving market demands: Standards-based technologies
www.dell.com Evolving market demands Standards-based technologies Innovation throughout the value chain drives lower cost, standards-based solutions for customers Dell’s innovation is wide-ranging: – Notebooks: ExpressCharge improved battery life and StrikeZone reduced disk drive damage. – Serve
Slide 20: Summary
www.dell.com Summary Value chain visibility optimized growth and profitability in Q3 Continued innovation and growth in key areas such as enterprise, international and printing Disciplined focus and differentiated model drive superior customer value and shareholder returns 20 Investor Relation
Slide 21: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information www.dell.com