Unisys Corporation New · NYSE:UIS
Unisys Corporation New — Unisys — Shareholder Meeting (April 2003)
33 slides from Unisys Corporation New's shareholder meeting presentation, Apr 24, 2003
Slide 1: Annual Meeting of Stockholders
Annual Meeting of Stockholders. Lawrence A. Weinbach Chairman & CEO April 24, 2003 Imagine it. Done.
Slide 2: Strong Industry, Tough Period
Strong Industry, Tough Period. U.S. Tech Spending ($ in Billions), 1980 – 2002 $ 500.0 413.2 326.4 239.6 152.7 65.9 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 Tech Spending ($ in Billions) Tech Spending Long-Term Trend Sources: U.S. Bureau of Economic Analysis, ML TechStrat
Slide 3: Profits Follow IT Spending Trends
Profits Follow IT Spending Trends. Net Income of Tech Firms vs. Tech Spending $ % 100 20 50 10 0 0 -50 -10 -100 -150 -20 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 MLO Net Income (LTM, $ in Billions) Tech Spending (YoY%) Compustat, U.S. Bureau of Economic Analysis, ML TechStrat
Slide 4: Services-Led, Technology-Enabled
UNISYS STRATEGY: Services-Led, Technology-Enabled. Provide value-added, end- to-end business integration 2002 Revenue solutions in focused $5.6 Billion markets Services: the driver Technology: the enabler Articulated in 1997, same vision today
Slide 5: Strategy Delivering Results
Strategy Delivering Results. Earnings consistency over past 2+ years Double-digit growth in outsourcing Marquee client wins... growing services backlog Leadership in emerging security market Transformation of internal skills set Consistent Performance in a Volatile Market.
Slide 6: 2002 Financial Results
2002 Financial Results. ($ in Millions, except gross profit) 2002 2001* Change Revenue $5,607.4 $6,018.1 -7% Gross Profit Margin 30.1% 27.4% +2.7 pts Operating Income $423.2 $270.1 +57% Net Income $223.0 $136.7 +63% * Excludes fourth-quarter 2001 cost reduction charge. Please refer to reconciliation
Slide 7: 2002 Accomplishments vs. Goals
2002 Accomplishments vs. Goals. Accelerate growth in annuity-based business Expand security solutions program Drive profitable growth in SI/solutions Accelerate sales of ES7000 servers Maintain tight cost controls Overall: Significant EPS growth
Slide 8: Continued Momentum in 1Q 2003
Continued Momentum in 1Q 2003. Met financial targets in tough environment Grew revenue 3% ... 20% growth in outsourcing Grew earnings per share by 20% Achieved substantial orders growth Won major long-term services contracts
Slide 9: Strategic Objectives for 2003
Strategic Objectives for 2003 Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ongo
Slide 10: Strategic Objectives for 2003
Strategic Objectives for 2003 Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ongo
Slide 11: Business Process Outsourcing
Business Process Outsourcing. Major growth opportunity for Unisys Leverages our core capabilities • Industry expertise ... transaction processing Attractive growth/margin potential • Growing demand for transaction processing • Less commoditized, capital intensive than ITO Significant proposal pipeli
Slide 12: Growing Recurring Revenue Base
Growing Recurring Revenue Base. PERCENT OF TOTAL REVENUE 100% 80% 60% 40% 20% 0% 1999 2000 2001 2002 1Q03 Recurring Services Business Other Services + Technology
Slide 13: Major Long-Term Contracts in 1Q03
Major Long-Term Contracts in 1Q03. Royal & SunAlliance (UK) • 10-year, $450M+ City of Minneapolis • 7-year, $56M City of Chicago • 3-year, $34M West Virginia Department HHR (Medicaid) • 4-year, $37M HBOS plc (UK) • 3-year infrastructure support Board of Airline Representatives (Australia) • 5-year,
Slide 14: Strategic Objectives for 2003
Strategic Objectives for 2003. Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ong
Slide 15: Secure Distributed Infrastructure
Secure Distributed Infrastructure. Clients placing greater focus on security of I.T. infrastructure Security a major challenge ... a Board-level issue • Regulatory compliance, accountability, cost control • Protection of information and assets Need for enterprise-wide approach • Security only as str
Slide 16: Growing List of Security Engagements
Growing List of Security Engagements. TSA: Infrastructure, Homeland Security Lloyds TSB: Security assessment Hong Kong government: Security assessments ING: Public Key infrastructure – Digital signature AIG: Assessing e-business clients for risk Bank of New York: Data security/privacy Dept. of Defen
Slide 17: Strategic Objectives for 2003
Strategic Objectives for 2003. Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ong
Slide 18: Moving Up Value Chain
Moving Up Value Chain. Decision-Making Business Value/Margin Chain Business Strategy Differentiated CEO/CFO Outsourcing/BPO Unisys IT Infrastructure Today CIO Security IT Director Unisys In Past Program Commoditized Technology Selection Manager Deployment Hosting Operations Support Manager
Slide 19: Strategic Objectives for 2003
Strategic Objectives for 2003. Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ong
Slide 20: High-End Servers
High-End Servers. ES7000 Intel-based servers • Leverage standard Intel/Microsoft technology • Enterprise capability, superior price/performance • Market developing slowly... but surely ClearPath Plus legacy servers • Meet processing growth needs of client base • Enable application modernization / in
Slide 21: ES7000 – New Client Accounts
ES7000 – New Client Accounts. Minolta Molina Healthcare Daihatsu, Japan Paramount Pictures JetBlue Airways CooperVision Philippine Port Authority Human Resources Development of Canada Kiyo Bank, Japan
Slide 22: Strategic Objectives for 2003
Strategic Objectives for 2003. Outsourcing: Continue double-digit growth in BPO Infrastructure: Drive growth in design/build/ manage secure distributed infrastructure SI/Consulting: Continue margin improvement Server Technology: Expand market for ES7000 Branding: Build market awareness of Unisys Ong
Slide 23: Brand Awareness: Advertising
Brand Awareness: Advertising.
Slide 24: Building Thought Leadership
Building Thought Leadership.
Slide 25: Continued Tight Cost Controls
Continued Tight Cost Controls. Cut SG&A Expenses By $400M Since 1999 $M % of Revenue $1,400 25% $1,385 $1,200 $1,277 $1,073 20% $992 $1,000 18.4% 18.5% 17.8% 17.7% $800 15% $600 10% $400 5% $200 $0 0% 1999 2000* 2001* 2002 * Excludes fourth-quarter 2000 and 2001 cost reduction charges. Please refer
Slide 26: 2003 Financial Outlook
2003 Financial Outlook. Business environment continues to be challenging Second quarter 2003 expectations: • EPS in 14 – 17 cents range • Revenue up slightly ... modest growth in services ... mid single-digit decline in technology Full-year 2003 expectation: • Continue to look for EPS of 77 – 82 cen
Slide 27: Summary. Positioned for Continued Earnings Growth in 2003
Summary. Unisys executing well in tough environment Benefiting from end-to-end, services-led model Growing annuity revenue base Emerging leadership in infrastructure security High-end server focus contributing to results Continued strong cost controls Positioned for Continued Earnings Growth in 2003
Slide 28: Forward-Looking Statements
Forward-Looking Statements. Statements made by Unisys during today’s presentation that are not historical facts, including those regarding future performance, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations
Slide 29: Reconciliation of GAAP to Non-GAAP Consolidated Statement of Income – 2001
Non-GAAP Information: Reconciliation of GAAP to Non-GAAP Consolidated Statement of Income – 2001 ($Millions) * The as reported amounts are restated for the adoption, effective January 1, 2003, of SFAS No. 145, which requires that previously recorded gains or losses on early extinguishments of debt t
Slide 30: Reconciliation of GAAP to Non-GAAP Consolidated Statement of Income – 2000
Non-GAAP Information: Reconciliation of GAAP to Non-GAAP Consolidated Statement of Income – 2000 ($Millions) * The as reported amounts are restated for the adoption, effective January 1, 2003, of SFAS No. 145, which requires that previously recorded gains or losses on early extinguishments of debt t
Slide 31: Reconciliation of GAAP to Non-GAAP Gross Profit and SG&A
Non-GAAP Information: Reconciliation of GAAP to Non-GAAP Gross Profit and SG&A ($Millions)
Slide 32: Non-GAAP Information
Non-GAAP Information The preceding financial data includes financial measures that are considered non-GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not prepared or p
Slide 33: Annual Meeting of Stockholders
Annual Meeting of Stockholders. Lawrence A. Weinbach Chairman & CEO April 24, 2003 Imagine it. Done.