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Ed Coleman, Chairman & CEO
Janet Haugen, SVP & CFO
Unisys Investor Presentation
www.unisys.com/investor March 2014
© 2014 Unisys Corporation. All rights reserved. 2
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 assumptions and involve risks and uncertainties that could cause actual results to differ from expectations. These risks and uncertainties are discussed in the company's reports filed with the SEC and in today's earnings release.
• This presentation also includes non-GAAP financial measures, including: non-GAAP Operating Profit, Net Cash (Debt), non-GAAP Diluted Earnings per Share, Free Cash Flow, EBITDA, and Adjusted EBITDA. Definitions of these non-GAAP financial measures and reconciliations to GAAP measures are included in this presentation.
• The financial information in this presentation is as of January 30, 2014 and Unisys undertakes no duty to update this information.
© 2014 Unisys Corporation. All rights reserved. 3
Unisys Corporation
Delivering a safer and more secure connected world
A company defined by:
• Mission-critical IT Solutions and Technology
• Extraordinary engineering capability
and mindset
– A continuing history of industry
“firsts” for over 125 years
• A deep reservoir of intellectual capital
• A passion for service excellence
• Global reach
• A strong partner ecosystem
• Tremendous client loyalty
© 2014 Unisys Corporation. All rights reserved. 4
Unisys Corporation
A company who has over the last 5 years:
• Significantly improved the competitiveness of the
company’s portfolio and cost structure
• Finished 2013 as its 5th consecutive year of profitability
and free cash flow
• Reduced its debt by $1 billion
• At December 31, 2013, cash balance of $640M exceeds
its $210M of debt
• From a low point in early March 2009, the closing share
price on February 28, 2014 represents a 10X
improvement
• Despite an increase of over $150M in its underfunded
pension position (from $1.3B to $1.5B)
• Invested in developing and bringing innovative software
products and solutions to market which solve the
challenge of …
Delivering a safer and more
secure connected world
© 2014 Unisys Corporation. All rights reserved. 5
Who We Are Growth Through
Disruptive Trends Our Areas of Strength
• $3.5B provider of
mission-critical IT
solutions
• Serving Fortune
500 corporations,
national and local
governments
around the globe
• Clients in 80+
countries across
the globe
• 23,000 employees
Security (including our Stealth
cybersecurity offerings)
Data Center
Transformation and
Outsourcing (including our ClearPath and
Forward! products)
Application
Modernization
and Outsourcing
End User
Outsourcing
and Support
Unisys Corporation
© 2014 Unisys Corporation. All rights reserved. 6
Mission Critical in 2014 – What’s Changed?
Breadth of mission-critical applications and services
• Proliferation of apps — from back office to front office
• From data centers to web to smartphones to “internet of things”
• Critical processes being automated at an accelerating rate
• Increasing interactions between applications and services
• Tailored for “me” as a customer or as an employee
• Volume of mission-critical work creates desire to use commodity technology
Expectations
• Then: Reliability, predictability, seasonal capacity, transactions equal revenue
• Now: “Always on, always up;” cross- platform and cross-network security; immediate (flash!) capacity; transactions equal price checks
• Immediate: “customer satisfaction surveys” via Twitter
Complexity
• Single vendor protocols versus multi-vendor interoperability
• Size, scope, speed of change and security threats are too complex to manage defensively or reactively
© 2014 Unisys Corporation. All rights reserved. 7
Requirements for Mission-Critical IT Services
System integration and IT outsourcing services must support this more demanding IT environment
• Seamless and uninterrupted customer and employee experience
• Certified delivery processes
• Persona-based end user support across multiple channels and devices
• Service improvement through increased use of application and end user analytics
• Seamless provisioning and integration of applications across multiple platforms – cloud integrator, hybrid enterprise
• Capability delivered via an “as a service model”
© 2014 Unisys Corporation. All rights reserved. 8
IT Outsourcing: Data Center and End User
“Strong Performer”
Forrester Research, Inc.
March 2013 report The Forrester WaveTM:
Global Workplace Services
“Visionaries” Quadrant
Gartner, Inc.
2013 Magic Quadrant report for Managed Mobility Services
"Leaders" Quadrant
Gartner, Inc.
2013 Magic Quadrant report on End-User Outsourcing Services
in North America.
“Challengers” Quadrant
Gartner, Inc.
2013 Magic Quadrant report for Data Center Outsourcing and
Infrastructure Utility Services in North America
© 2014 Unisys Corporation. All rights reserved. 9
Brazil Ports –
Intelligent Carrier
International
Thermonuclear
Experimental
Reactor (ITER):
End-to-End
Security Project
Targeting and
Analysis
Systems Program
Office (TASPO)
U.S. National
Archives
and Records
Administration
New Zealand
Transport Agency
Registry Systems
Modernization
Systems Integration
Application Modernization Security
Michigan
SACWIS
© 2014 Unisys Corporation. All rights reserved. 10
Requirements for Mission-Critical Systems
Today’s mission-critical infrastructures must provide
• a mission-critical fabric across end points, applications and infrastructure
• using cost-effective technology and open industry standards
• Zero-trust security across users, applications and data centers
© 2014 Unisys Corporation. All rights reserved. 11
Our Technology
ClearPath
© 2014 Unisys Corporation. All rights reserved. 12
ClearPath is a Mission-Critical Operating Platform
“No other server maker mixing various server
architectures has done anything even close
to as elegant a job at converging platforms as
Unisys has done.”
- The Register, September 2013
ClearPath Attributes
Reliability and
Resiliency Security
Mobile
Computing Agility
Automation
Scalability
© 2014 Unisys Corporation. All rights reserved. 13
Unmatched Security Record of Unisys ClearPath
Operating System Number of Vulnerabilities Date of Last Vulnerability Compromised User Data
Unisys ClearPath OS2200 0 - No
Unisys ClearPath MCP 1 12/31/2002 No
IBM iSeries 21 06/11/2009 Yes
IBM zSeries 23 01/02/2014 Yes
OpenVMS 35 12/13/2012 Yes
HP-UX 325 07/29/2013 Yes
AIX 351 10/04/2013 Yes
Unix 666 12/28/2013 Yes
Solaris 894 01/15/2014 Yes
Windows 3,365 02/06/2014 Yes
Linux 4,190 02/10/2014 Yes
Data collected 2/10/14 This chart was developed by Unisys and represents Unisys’ interpretation of publically available NIST Data.
“Unisys has made a significant breakthrough with its advanced ClearPath architecture, achieving one
of the highest levels of security that any systems provider had delivered on the Intel Xeon Processor
platform.”
- Intel Corporation, March 2013
© 2014 Unisys Corporation. All rights reserved. 14
The Forward! Program extends the Unisys mission critical brand to the Linux
and Windows environments, providing a compelling alternative to Unix systems.
SPC Cloud
Management
High Speed
Interconnect
Technology
Fabric
Management
Environment
Linux &
Windows
Stealth Data
Security
“Big Data”
Hadoop
Platform
Forward!
Unisys Intel Platform
Hardened
Linux
Any Application Workload
Secure
Windows
s-Par™
Forward! OS Services
© 2014 Unisys Corporation. All rights reserved. 15
Unix (HP-UX, Solaris, AIX) Workload Migration to Linux on Forward!
• Unix like partitioning, reliability, availability and security capabilities with Enterprise class support
• Better price/performance ratio and time to deployment
• Improved agility of platform
Consolidation of non-virtualized workloads from Linux/Windows to Forward!
• Enterprise class partitioning on Industry standard Intel Xeon platform for 6:1 consolidation
• Improved predictive performance, security in a scale out fabric architecture for mission-critical workloads with better price/performance
SAP ERP Workload Migration from Unix to Linux or Windows to Windows on Forward!
• SAP performance improvement via high speed interconnect across multi-nodes
• Predictability of application performance for Unix like RAS with better Price/Performance
• Ideal architecture for HANA based applications modules.
One platform. No second thoughts.
© 2014 Unisys Corporation. All rights reserved. 16
• Cybersecurity software, running on Windows and Linux computers
• Provides compartmentalized security by implementing virtual communities of interest (COI) for predetermined endpoint users
• Authenticates and authorizes users based on identity, not network topology
• Because it executes between the network and link protocol layers, it has no effect on applications or existing networks
• Makes systems undiscoverable by attackers
Stealth Shim
7. Application
6. Presentation
5. Session
4. Transport
3. Network
1. Physical
2. Link
NIC
© 2014 Unisys Corporation. All rights reserved. 17
Stealth for Cloud
• Stealth for Amazon Web Services
• Secure Private Cloud
Stealth for Mobile
Network Security
• Data Center Segmentation
• Stealth for XP
• Regional Isolation
• Secure Remote Access
• Secure Virtual Terminal
You Can’t Hack What You Can’t See.
© 2014 Unisys Corporation. All rights reserved. 18
Growth Drivers 2014-2016
• Technology
– Forward! fabric based servers
– Unisys Stealth cybersecurity software
– Continued innovations in ClearPath
• Services
– End User Outsourcing
– Cloud-based and SaaS delivery models
– Unisys software & solutions content
– Application Managed Services
• Reseller Channel
© 2014 Unisys Corporation. All rights reserved. 19
2014 Financial Goals
• Return the Company to revenue growth
– Services flat to slight growth – consistent with the market
– Technology growth driven by new innovative products
• Stealth and Forward!
• Invest in the new products with 2014 incremental operating expenses of 1-2% of total revenue ($35 million - $70 million)
• Targeting pretax profit growth versus 2013, net of the incremental operating expenses
• Free cash flow in 2014 impacted by:
– Increased operating expenses to support growth
– Potential incremental capital expenditures of $50 million
– Increase of $85 million in annual pension contributions
© 2014 Unisys Corporation. All rights reserved. 20
Summary
• 2013 was our 5th consecutive year of profitability and positive free cash flow
• Focused on driving profitable top-line growth
• Continued progress in developing new, innovated products and solutions
• Investing in growth programs to position Unisys for 2014 and beyond
© 2014 Unisys Corporation. All rights reserved.
Thank You
© 2014 Unisys Corporation. All rights reserved. 22
U.S.
Federal
15%
Revenue by
Industry
Revenue By Business
$1,176
$957
$428
$253 $182
$461
$0
$250
$500
$750
$1,000
$1,250
$1,500
InformationTechnologyOutsourcing
Systems Integration InfrastructureServices
Business ProcessOutsourcing
Core Maintenance Technology
$M
U.S.
Federal
15%
2013 Revenue Overview
Services = 87% Tech. = 13%
Unisys 2013
Customer
Revenue
$3,457M
Revenue by
Geography
Europe 33%
North America
41%
Latin America
12% Asia
Pacific 14%
Public Sector
41%
Commercial 36%
Financial 23%
© 2014 Unisys Corporation. All rights reserved. 23
$M (excluding EPS) 4Q13 4Q12 Y/Y Ch FY13 FY12 Y/Y Ch
Revenue
• Gross Profit
• Gross Profit Margin
$996
$315
31.7%
$979
$286
29.2%
2%
10%
2.5 pts
$3,457
$848
24.5%
$3,706
$974
26.3%
(7%)
(13%)
(1.8 pts)
Operating Expenses (SG&A plus R&D)
• Operating Profit
• Operating Profit Margin
$160
$156
15.7%
$171
$115
11.7%
(7%)
36%
4.0 pts
$629
$220
6.4%
$654
$319
8.6%
(4%)
(31%)
(2.2 pts)
Interest Expense $2 $3 $10 $28
Other Income (Expense) ($1) ($3) $10 ($38)
Pretax Income $152 $109 39% $219 $254 (14%)
Tax Provision $28 $21 $99 $97
Net Income $117 $82 44% $92 $129 (29%)
Diluted Earnings per Share $2.37 $1.67 42% $2.08 $2.84 (27%)
Non-GAAP Diluted Earnings per Share* $2.82 $2.27 24% $3.87 $5.50 (30%)
Financial Results
*See Schedules A and B: GAAP to non-GAAP Reconciliation
© 2014 Unisys Corporation. All rights reserved. 24
Cash Flow Comparison
$M 4Q13 4Q12 FY13 FY12
Cash Flow From Operations $141 $154 $187 $261
Capital Expenditures $48 $36 $151 $132
Free Cash Flow* $93 $118 $36 $129
Pension Funding $45 $26 $147 $201
Free Cash Flow Before Pension Funding* $138 $144 $183 $330
Depreciation & Amortization $39 $46 $160 $175
EBITDA** $191 $155 $377 $445
Adjusted EBITDA** $215 $187 $471 $584
Cash Balance at December 31 $640 $656
Debt Balance at December 31 $210 $210
Net Cash at December 31 $430 $445
See Schedules *C and **D: GAAP to non-GAAP Reconciliation
© 2014 Unisys Corporation. All rights reserved. 25
Capital Structure
FY13 FY12
Debt Balance ($M)* $210 $210
Common Shares Outstanding (millions) 44.0 44.0
Preferred Shares Outstanding (millions)** 2.6 2.6
*The $210 million debt balance at December 31, 2013 is comprised of 6.25% senior notes due in 2017 which were
issued in the third quarter of 2012.
**All of the 2.6 million shares of the Unisys 6.25% mandatory convertible preferred stock converted into common stock
effective March 1, 2014. The conversion rate per share of mandatory convertible preferred stock was 2.6717 shares of
common stock for a total of approximately 6.9 million common shares.
© 2014 Unisys Corporation. All rights reserved. 26
Defined Benefit Pension Plans
$6.2 $6.7
$8.6 $8.2
-$2.4
-$1.5
-$4
-$2
$0
$2
$4
$6
$8
$10
Assets
Liabilities
Deficit
$B December 31, 2012 December 31, 2013
In accordance with U.S. GAAP, discount rates are set annually at December 31.
© 2014 Unisys Corporation. All rights reserved. 27
Additional Pension Information
Worldwide P&L Impact ($M) 2013 2014E
Total Pension Expense $93.5 $78.2
U.S. Qualified Defined Benefit Pension Plan
Expected Return on Assets 8.00% 7.72%
Actual Return 16.42% --
U.S. GAAP Discount Rate at 12/31/12
4.01%
at 12/31/13
5.02%
International Qualified Defined Benefit Pension Plans
Expected Return on Assets 6.40% 6.45%
Weighted Average U.S. GAAP Discount Rate at 12/31/12
3.92%
at 12/31/13
4.15%
All estimates are based on expected asset returns and discount rate assumptions as calculated at December 31, 2013.
© 2014 Unisys Corporation. All rights reserved. 28
Estimated Future Pension Cash Contributions as of December 31, 2013
The funding estimates for our U.S. qualified defined benefit pension plan are based on current estimated asset returns and the funding discount
rates used for the U.S. qualified defined benefit plan which have been updated to reflect the 2014 discount rates. The future funding
requirements are likely to change based on, among other items, market conditions and changes in discount rates.
Current estimates for future contributions to international plans are based on local funding regulations and agreements and are likely to change
in 2015 and beyond based on a number of factors including market conditions, changes in discount rates and changes in currency rates.
© 2014 Unisys Corporation. All rights reserved. 29
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 non-GAAP information which management believes provides useful information to
investors.
Non-GAAP Operating Profit – In order to provide investors a better understanding of the company's operational results, this measure
attempts to show operating profit excluding the effect of pension income and expense.
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 is calculated by
subtracting Long-Term Debt from the company's cash balance.
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 cash flow from operating activities in excess of amounts required for reinvestment. Because of the significance of the
company's pension funding obligations in 2013 and 2012, free cash flow before pension funding is also provided.
EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is an approximate measure of a company's
operating cash flow based on data from the company's income statement. EBITDA is calculated as earnings before the deduction of
interest expenses, taxes, depreciation, and amortization. Management believes this measure may be relevant to investors due to the
level of fixed assets and related depreciation charges. This measure is also of interest to the company's creditors, since it provides a
perspective on earnings available for interest payments.
Adjusted EBITDA – Unisys completed debt reductions in 2012. As a result of these reductions, Unisys recorded pretax debt reduction
charges of $30.6. There were no debt reductions during 2013. The company also recorded pretax pension expense of $24.1 million
and $31.5 million, respectively, during the fourth quarter of 2013 and 2012. Unisys recorded pretax pension expense of $93.5 million
and $108.2 million, respectively, during 2013 and 2012. In order to provide investors with additional understanding of the company's
operating results, these charges are excluded from the Adjusted EBITDA calculation.
© 2014 Unisys Corporation. All rights reserved. 30
Schedule A: 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 4Q12 1Q13 2Q13 3Q13 4Q13
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 1,044.6 911.2 937.2 1,020.1 985.3 928.4 921.3 877.4 979.3 809.9 858.6 792.1 995.9
Operating
Profit 14.8 23.2 (55.7) 15.2 69.1 111.6 134.1 58.5 106.5 76.1 134.6 41.9 48.1 113.0 121.6 64.4 79.0 61.2 114.6 1.6 38.0 24.0 155.9
Pension
(Inc)/Exp (8.8) (15.0) (16.0) (2.9) (8.9) (5.2) (6.6) (0.3) (1.2) (0.8) (0.6) 9.0 8.7 8.5 8.1 25.7 21.1 29.9 31.5 23.2 22.8 23.4 24.1
TTM
Revenue 4,768.4 4,576.0 4,440.1 4,385.7 4,319.3 4,279.4 4,133.6 4,019.6 3,953.4 3,853.6 3,913.1 3,853.8 3,871.0 3,855.1 3,712.4 3,706.4 3,587.9 3,525.2 3,439.9 3,456.5
TTM
Operating
Profit
(2.5) 51.8 140.2 330.0 373.3 410.7 375.2 375.7 359.1 300.7 337.6 324.6 347.1 378.0 326.2 319.2 256.4 215.4 178.2 219.5
OPM % (0.1%) 1.1% 3.2% 7.5% 8.6% 9.6% 9.1% 9.3% 9.1% 7.8% 8.6% 8.4% 9.0% 9.8% 8.8% 8.6% 7.1% 6.1% 5.2% 6.4%
Excluding
Pension
Op Profit
Excluding
Pension
6.0 8.2 (71.7) 12.3 60.2 106.4 127.5 58.2 105.3 75.3 134.0 50.9 56.8 121.5 129.7 90.1 100.1 91.1 146.1 24.8 60.8 47.4 180.0
TTM Op
Profit
Excluding
Pension
(45.2) 9.0 107.2 306.4 352.3 397.4 366.3 372.8 365.5 317.0 363.2 358.9 398.1 441.4 411.0 427.4 362.1 322.8 279.1 313.0
OPM % (0.9%) 0.2% 2.4% 7.0% 8.2% 9.3% 8.9% 9.3% 9.2% 8.2% 9.3% 9.3% 10.3% 11.4% 11.1% 11.5% 10.1% 9.2% 8.1% 9.1%
© 2014 Unisys Corporation. All rights reserved. 31
Schedule B: 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 4Q12 1Q13 2Q13 3Q13 4Q13
Long-Term Debt
(Including
Current
Maturities)
1,060.6 1,060.3 1,061.2 911.0 911.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 210.8 210.3 210.7 210.4 210.1 210.0
AR
Securitization /
Revolver Usage
141.0 120.0 130.0 118.0 100.0 - - - - - - - - - - - - - - - -
Subtotal 1,201.6 1,180.3 1,191.2 1,029.0 1,011.7 847.4 836.4 837.5 824.0 619.3 447.4 445.3 359.7 295.5 292.4 210.8 210.3 210.7 210.4 210.1 210.0
Cash 544.0 468.7 475.0 473.6 647.6 468.5 496.5 688.7 828.3 833.1 625.0 667.3 714.9 654.7 659.7 541.6 655.6 628.6 575.6 555.9 639.8
Net Cash (Debt) (657.6) (711.6) (716.2) (555.4) (364.1) (378.9) (339.9) (148.8) 4.3 213.8 177.6 222.0 355.2 359.2 367.3 330.8 445.3 417.9 365.2 345.8 429.8
© 2014 Unisys Corporation. All rights reserved. 32
Schedule C: GAAP to Non-GAAP Reconciliation
Free Cash Flow
$M 4Q13 4Q12 FY13 FY12
Cash Provided by Operations $141.2 $153.9 $187.4 $261.3
Capital Expenditures (48.4) (35.9) (151.4) (132.6)
Free Cash Flow $92.8 $118.0 $36.0 $128.7
Pension Funding 45.6 26.4 147.2 201.5
Free Cash Flow Before Pension Funding $138.4 $144.4 $183.2 $330.2
© 2014 Unisys Corporation. All rights reserved. 33
Schedule D: GAAP to Non-GAAP Reconciliation
EBITDA and Adjusted EBITDA
$M 4Q13 4Q12 FY13 FY12
Net Income Attributable to Unisys $121.5 $85.9 $108.5 $145.6
Interest Expense 2.2 2.5 9.9 27.5
Income Tax Provision 28.2 20.5 99.3 97.3
Depreciation & Amortization 38.7 46.2 159.6 174.6
EBITDA $190.6 $155.1 $377.3 $445.0
Debt Reduction Charges -- -- -- 30.6
Pension Expense 24.1 31.5 93.5 108.2
Adjusted EBITDA $214.7 $186.6 $470.8 $583.8
Earnings before Interest, Taxes, Depreciation and Amortization
© 2014 Unisys Corporation. All rights reserved.
www.unisys.com
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