Slide 1: Dell Q3 FY05 Results
Dell Q3 FY05 Results November 11, 2004
Slide 2: Special Note
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 to future results
Slide 3: Agenda
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
Slide 4: Q3 FY05 Highlights
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 - an industry record Operating income of nearly $1.1 billion EPS of $0.33 up +27% Y/Y Cash Flow from Operations of nea
Slide 5: Q3 FY05 Financial Highlights
LIQUIDITY $1.8 billion Cash flow from operations* $12.4 billion in cash & investments* CCC -34 days1 PROFITABILITY Gross margin = 18.5% OPEX percent of revenue = 9.7% Operating margin = 8.8% GROWTH Dell units up 22%; mkt ex-Dell up 10.5% 18% Rev growth 27% EPS growth Delivered $0.33 EPS* and $12.5 b
Slide 6: Q3 FY05 Product Summary
Q3 FY05 Product Summary Unit Growth Unit Growth Revenue Growth Revenue Growth Product Y/Y Q/Q Y/Y Q/Q Desktops 18% 9% 14% 7% Notebooks 35% 14% 23% 11% Enterprise 15% 2% 10% 1% TOTAL 22% 10% 18% 7% Total Units up 22% Y/Y - 11 point growth premium to rest of market In the enterprise, Dell | EMC revenu
Slide 7: Q3 Product Performance: Servers & Storage
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 Q3 Product Performance: Servers & Storage Servers Continued growth in mid-ran
Slide 8: Q3 Product Performance: Client Systems
Q3 Product Performance: Client Systems Inspiron 9200 Note: Growth rates Y/Y unless otherwise noted Latitude D600 OptiPlex Family Dimension 4700C 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'
Slide 9: Q3 Product Performance: Enhanced Services
Q3 Product Performance: Enhanced Services Dell Enhanced Services Q3 Results Enhanced services revenue up 32% Europe and Asia combined grew nearly 60% Managed Services showed strong growth Revenue up 47% Agreement with Honeywell increased seats under management to 1.5 million Continue to expand servi
Slide 10: Q3 Product Performance: Software & Peripherals
Q3 Product Performance: Software & Peripherals Note: Growth rates Y/Y unless otherwise noted W2300 LCD TV WW Revenues up 37% >30% growth in all regions Total displays revenue up 38% Product Launches 42-inch Plasma display for under $2,300 26" and 19" LCD TVs Refreshed MP3 lineup, pocket form factor
Slide 11: Q3 Product Performance: Printers
Q3 Product Performance: Printers Note: Growth rates Y/Y unless otherwise noted Photo Printer 540 Total units nearly doubled sequentially on improving profitability Lasers Launched color lasers Dell 5100cn was named Editor's Choice by an independent tester Consumer Expect US inkjet share to be up 5 t
Slide 12: Q3 FY05 Region Summary
Q3 FY05 Region Summary Revenue Op Inc Revenue Growth Revenue Growth Op Inc Growth Op Inc Growth Unit Growth Unit Growth REGION $ M $ M Y/Y Q/Q Y/Y Q/Q Y/Y Q/Q Americas Business Unit 6,644 689 14% 4% 19% 7% 20% 3% U.S. Consumer 1,937 97 14% 24% -1% 11% 15% 31% Total Americas 8,581 786 14% 8% 16% 8% 1
Slide 13: 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 Business Unit 20% unit growth; margins up 40 basis points
Slide 14: 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 1.6 points Y/Y Closed the gap with regional leader by 2 points Q3 Geographic Ex
Slide 15: 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 Server unit growth of 27% was 2X the rest of the market In Japan, units grew
Slide 16: Q4 FY05 Outlook
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 $0.36 EPS; up 24% Y/Y C
Slide 17: Structural Advantages and Consistency in Q3
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 an all-time high Ahea
Slide 18: IT Spending Environment
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% Y/Y Businesses movi
Slide 19: Evolving market demands: standards-based technologies
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. Servers: OpenManage system
Slide 20: Summary
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
Slide 21: Visit www.dell.com/investor for additional information
Visit www.dell.com/investor for additional information