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Information Technology at Plantronics. Tom Gill, VP and CIO. May 13, 2010. Agenda. Company Overview Unified Communications Opportunity and Solutions Bluetooth Headsets Financials IT Makes it Happen. Plantronics is the Headset Market Leader . Brand Promise: Sound, Style, Simplicity - PowerPoint PPT Presentation
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Tom Gill, VP and CIO
Information Technology at Plantronics
May 13, 2010
2
Agenda
• Company Overview
• Unified Communications Opportunity and
Solutions
• Bluetooth Headsets
• Financials
• IT Makes it Happen
3
Brand Promise: Sound, Style, Simplicity
Product quality and breadth
Track record of growth and profitability
Plantronics is the Headset Market Leader
Leader in Office, Contact Center, Bluetooth
No debt, approximately $7.67 cash per share
Cash flow positive for over 14 years
4
Broad Blue-Chip Customer Base
100% of Fortune 100 companies use Plantronics
5
Business Highlights (December Quarter)
• Corporate– Revenue, operating income and EPS above guidance– Long-term target gross & operating margins achieved– Demand improved in all geographies
» Strong rebound in EMEA: +34% from Q2FY10– Sale of Altec Lansing (AEG) effective December 1, 2009
• Office & Contact Center: long-term prospects remain strong– Office & Contact Center (OCC) demand improved – Unified Communications (UC) opportunity continues to be validated
• Bluetooth– Profitable: improved cost structure, seasonal strength & mix– Improving demand (hands-free laws)– Market share gains: Voyager Pro & Discovery 975
6
$MCorporate Revenue, Continuing Operations
PLT Has Adapted Well to Market Shifts for Decades
•
Every Market Shift Increased Our Addressable Market
(March Fiscal)
WirelessContact Center Office CordedTelCo UC
CS70
Supraplus
Supra M10Duoset
EncorePro
DA60
Savi Office
IP40
Voyager510s
CS50
Incremental Market Opportunities
7
$0
$100
$200
$300
$400
$500
$600
FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
-11.3% CAGR
Office & Contact Center Revenue
-25%14.5% CAGR 17% CAGR
-17%
10% CAGR
7.4% CAGR
$M
?-25%?
Public
Unified Communications (UC)• $350M in incremental revenue expected by FY15• Doubles addressable office headset opportunity
9
PC and Telephony Presence
Voice, Video, IM & Presence is Key to all Unified Communications Solutions
UC is About a Different Way of Working
10
Cost Savings is the Biggest Driver for UC Adoption
• UC solutions integrate multiple enterprise communication methods onto one platform• UC adds functionality to existing communication technology investments
Source: Plantronics UC Study Nov/Dec 2009
11
UC ROI & Payback is Validated
Key Savings**
• 20% reduction in conference calling costs
• Reduced travel costs
Organization
• $9.6M annual savings:• Carrier, Travel, PBX• IRR: 90%, 10 Mo.
Payback
• Travel costs reduced 20%• Enhanced learning
• Long-distance savings of $33K annually
*Aberdeen Group 2009, **MSFT UC Case Studies
80% of Companies Expect Payback of Less than 1 Year*
12
The Impact of the Audio Endpoint
Public
Plantronics UC Solutions• All Devices: Wireless, Corded, Telephones, Speakerphones • Strong Pipeline
14
UC Portfolio Spring 2010
Blackwire 600
Blackwire 200
Blackwire 400
Savi 400
Savi Office WO
Calisto 500
Calisto 200
Voyager PRO UC
Calisto 400
New
Refresh
15
Compatibility with Major Vendors
Softphone Integration and Support
Optimized UC products provide plug and play call control with OCS
Plug in provides call control with UC products
and Sametime
Call Control with UC products and leading
softphones
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PLT is the Preferred Choice of Leading IT Departments
PLT Mission: Make the Headset an Indispensable Business Tool
Compatible with all UC voice platforms and PBX’s
All solutions: headsets (DECT, Bluetooth, Corded), handsets, USB speakerphones
Help desk support
Global distribution
Intelligent software interface
Portfolio strategy
Plantronics legacy
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Higher Investment = Strong UC Product Pipeline
Intelligence
User State Information
Ease of Use
Cross-System Integration
Control
Unified Call Management
Quality
Audio Clarity & Reliability
18Source: Frost & Sullivan November, 2008
UC Voice Seats Are Driving Headsets Sales
UC Voice Seats Deployed(cumulative)
Millions
MSFT Expects 50% Headset Attach Rate for Voice Seats
19
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
CY 2008 CY 2014E
Other UC Comm. Devices
UC Headsets
Office/UC Overlap
Office Headsets
6% CAGR
PLT Est. $350M Incremental Revenue by FY15
Unified Communications Doubles PLT Addressable Office Market
WW Office Headset Market
WW Office Headset & UC Device Market
$M
UC Device
Growth rates vary with economy, consumer adoption rates, competition and resulting price levels, and other factors Sources: Frost & Sullivan, Nemertes, Gartner, IDC, IDG, Strategy Analytics, NPD Intellect, GFK, Carnegie Research, Company estimates
15% CAGR19% C
AGR
Public
Bluetooth Headsets• Market leading position• Profitable
21
Highest Rated Bluetooth Headsets
Dual Microphones, AudioIQ2 & Windsmart Technology
Discovery 975 Voyager Pro
22
Bluetooth Retail: #1 in Revenue
Source: The NPD Group/Retail Tracking Service
% of Retail $ Share (US)
Note: The NPD Group revised historical data in their Sept. 2008 report to account for adding and/or removing channel partners or updates to their methodology, resulting in new historical rankings.
Public
Financials• Achieved long-term margin target model
24
• Revenue: $165.9M, +9% YOY, exceeded guidance of $155M - $160M
• Gross Margin: 48.9% vs. 40.1% in prior year
• Operating Expenses: $49.2M vs. $52.2M in prior year: -6%
• Operating Income: $31.8M vs. $9.0M in prior year– Operating Margin 19.2% vs. 5.9% in prior year
• Earnings per share: $0.50 vs. $0.14 in prior year
• Cash Flow from Operations $36.3M vs. $5.4M in prior year
• Cash, Equivalents & ST Investments: $316.5M or ~$6.40 per share
Q3 FY10 Financial Highlights
(Non-GAAP, Continuing Operations)
25
Q3 FY09
Q2 FY10
Q3 FY10
Q2-Q3 % Change
YoY % Change
YoY $ Change
OCC $101.7 $93.5 $103.1 10.3% 1.4% $1.4
Mobile $36.0 $34.7 $46.9 35.4% 30.4% $10.9
Gaming/Comp $8.5 $9.0 $11.1 22.8% 29.8% $2.5
Clarity $6.4 $7.3 $4.8 -33.8% -24.5% -$1.6
Total $152.6 $144.5 $165.9 14.9% 8.7% $13.3
Revenue by Product Group & Geography
($ Millions)
U.S. $91.6 $93.4 $99.1 6.2% 8.3% $7.6EMEA $42.4 $31.2 $41.6 33.5% -1.8% -$0.8Asia Pacific $8.0 $12.2 $12.5 2.3% 55.0% $4.4
Americas(excl. U.S.)
$10.6 $7.7 $12.7 64.1% 19.8% $2.1
Total $152.6 $144.5 $165.9 14.9% 8.7% $13.3
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Gross Margin
45.4%
47.9%
40.1%39.2%
49.0% 48.7% 48.9%
39%
40%
41%
42%
43%
44%
45%
46%
47%
48%
49%
50%
Q109 Q209 Q309 Q409 Q110 Q210 Q310
$121
Non-GAAP, Continuing Operations
Percent
Target Range: 45% - 48%
27
Operating Margin
16.9%
19.4%
5.9%6.5%
17.9%18.5%
19.2%
5%
10%
15%
20%
Q109 Q209 Q309 Q409 Q110 Q210 Q310
$121
Non-GAAP, Continuing Operations
Percent
Target Range: 18% - 20%
28
Key Focus Areas
• UC Market Position
• UC Product Pipeline
• Bluetooth Profitability
• Maintaining Strong Margins
Public
IT Makes it Happen!
30
IT Overview
• 90+ Employees in six locations
• Key Locations
–Santa Cruz Corporate Headquarters
–Tijuana factory, Design Center and Contact Center
–Suzhou China APAC Hub
–Swindon UK EMEA Hub
31
Managing Plantronics Global Technology Investment
Networks and connectivity
Voice communication
Email and messaging
Servers and storage
Desktop, notebooks, mobile devices
Business systems and process optimization
Service desks and support
32
Key IT Roles
Business Analysts
Application Developers
Database Administrators
Project Managers
System and Storage Administrators
Network Engineers
UC Administrators
Service Desk Specialists
33
Key Competencies
Project management
Security and compliance
Network architecture
Virtualization
SaaS application management / vendor management
Unified Communications
Business process optimization
34
Critical Applications
Oracle E-Business Suite – Financials, Manufacturing, Supply Chain, HR
Salesforce.com – Sales and Customer Support
Microsoft Stack – XP/Win7, Office, Sharepoint, Exchange, Project Server, Office Communicator, SQLServer and more
Business Intelligence – Oracle BI, Hyperion and canned analytics
Plantronics.com
+ 100 other important apps
35
Key Infrastructure Technologies
LAN / WAN Masergy MPLS Network Cisco routers, switches and WiFi
Servers – Windows, Linux and Sun Solaris
VMWare virtualization platform
EMC Storage Area Networks
Mobility devices keep us connnected 24x7 Blackberry iPhone Windows Mobile iPad?
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Tools
Enable reliability, scalability and security
Network and server monitoring
Asset management
Host and client imaging
Intrusion detection
Digital loss prevention
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Cloud Computing Has Arrived
Internal clouds Application development and test environments UC labs running multiple versions of leading apps from IBM, Cisco,
Avaya, Microsoft and more
External Clouds 20+ SaaS applications and services Taleo applicant tracking Salesforce.com for marketing, sales and support Salary.com for comp planning and reviews Right Now Technology customer support knowledge base Iron Mountain Connected backs up client system files Dell Message One high availability Exchange system for email
business continuity
38
IT Challenges
Recent carve out and sale of Altec Lansing
Consumerization of IT
Change Management
IT Service Delivery Processes
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