Berliner Tageblatt - Unisys Corporation - Unisys Announces 4Q and Full-Year 2023 Results

Unisys Corporation - Unisys Announces 4Q and Full-Year 2023 Results
Unisys Corporation - Unisys Announces 4Q and Full-Year 2023 Results

Unisys Corporation - Unisys Announces 4Q and Full-Year 2023 Results

Latest stock market news: 21.02.2024 / 12:28pm

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Unisys Announces 4Q and Full-Year 2023 Results

 

Company Exceeds 2023 Upwardly Revised Revenue and Profitability Guidance, Delivers Strong Growth in Contract Signings in 4Q

  • Full-year revenue growth of 1.8% year over year (YoY), or 1.6% in constant currency(1); Excluding License and Support (Ex-L&S)(15) revenue growth of 4.9% YoY both as reported and in constant currency
  • 4Q revenue up 0.1% YoY, a decline of 2.1% in constant currency; 4Q Ex-L&S revenue growth of 6.8% YoY, or 4.3% in constant currency
  • Full-year operating profit margin of 3.8%; non-GAAP operating profit(8) margin of 7.0%
  • Full-year operating cash flow of $74.2 million compared to $12.7 million for 2022, and free cash flow(11) of ($4.5) million compared to ($73.2) million for 2022
  • Ex-L&S Total Contract Value (TCV)(4) increased 27% YoY for the full-year and 137% YoY in the fourth quarter, including New Business(6) TCV growth of 18% YoY for the full-year and 84% YoY in the fourth quarter
  • Company issues full-year 2024 guidance of (1.5)% to 1.5% YoY constant currency revenue growth and 5.5% to 7.5% non-GAAP operating profit margin
  • Constant currency revenue guidance implies (1.0)% to 2.0% revenue growth as reported, based on recent exchange rates, and assumes Ex-L&S full-year revenue growth of 1.5% to 5.0% and License and Support (L&S)(14) revenue of approximately $375 million

BLUE BELL, Pa., Feb. 21, 2024/ -- Unisys (NYSE: UIS) reported financial results for the fourth quarter and full year 2023.

"Our fourth quarter performance capped a successful year for Unisys," said Unisys Chair and CEO Peter A. Altabef. "In 2023, we exceeded our upwardly revised full-year guidance ranges. During the year, we grew our backlog, signed 18% more New Business TCV than the prior year, and expanded our New Business pipeline."

"This year, we progressed towards our long-term financial goals," said Unisys Chief Financial Officer Deb McCann. "We are particularly pleased with our full-year free cash flow performance, which improved by nearly $70 million year-over-year. We also continued to execute our pension management strategy with two annuity purchases that transferred an aggregate of approximately $500 million in pension liabilities to a third-party insurer."

Financial Highlights
Please refer to the accompanying financial tables for a reconciliation of the GAAP to non-GAAP measures presented except for financial guidance since such a reconciliation is not practicable without unreasonable effort.

(In millions, except numbers presented as percentages)

 

4Q23

 

4Q22

 

FY23

 

FY22

Revenue

 

$557.6

 

$557.0

 

$2,015.4

 

$1,979.9

YoY revenue growth

 

0.1 %

 

 

 

1.8 %

 

 

YoY revenue growth in constant currency

 

(2.1) %

 

 

 

1.6 %

 

 

Ex-L&S revenue

 

$413.3

 

$386.9

 

$1,586.3

 

$1,511.9

YoY revenue growth

 

6.8 %

 

 

 

4.9 %

 

 

YoY revenue growth in constant currency

 

4.3 %

 

 

 

4.9 %

 

 

L&S revenue

 

$144.3

 

$170.1

 

$429.1

 

$468.0

YoY revenue growth

 

(15.2) %

 

 

 

(8.3) %

 

 

YoY revenue growth in constant currency

 

(16.9) %

 

 

 

(9.0) %

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$181.2

 

$189.8

 

$551.3

 

$529.6

Gross profit percent

 

32.5 %

 

34.1 %

 

27.4 %

 

26.7 %

Ex-L&S gross profit

 

$68.4

 

$45.7

 

$240.0

 

$168.8

Ex-L&S gross profit percent

 

16.5 %

 

11.8 %

 

15.1 %

 

11.2 %

 

 

 

 

 

 

 

 

 

Operating profit

 

$44.0

 

$50.0

 

$76.9

 

$52.2

Operating profit percent

 

7.9 %

 

9.0 %

 

3.8 %

 

2.6 %

Non-GAAP operating profit

 

$64.0

 

$112.4

 

$140.8

 

$159.0

Non-GAAP operating profit percent

 

11.5 %

 

20.2 %

 

7.0 %

 

8.0 %

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Unisys Corporation

 

($165.3)

 

$8.5

 

($430.7)

 

($106.0)

Non-GAAP net income attributable to Unisys Corporation(10)

 

$35.4

 

$82.8

 

$41.7

 

$74.8

 

 

 

 

 

 

 

 

 

EBITDA

 

($103.6)

 

$85.1

 

($204.5)

 

$140.9

Adjusted EBITDA(9)

 

$100.4

 

$148.7

 

$285.9

 

$325.8

Adjusted EBITDA as a percentage of revenue

18.0 %

 

26.7 %

 

14.2 %

 

16.5 %

Fourth Quarter 2023 Results

Revenue was up 0.1% YoY, a decline of 2.1% in constant currency. Gross profit margin was down 160 bps YoY driven by the timing of software license renewals.

Ex-L&S revenue increased 6.8% YoY, or 4.3% in constant currency, primarily driven by New Business with existing clients. Gross profit margin was up 470 bps YoY primarily driven by lower cost reduction charges as well as New Business with existing clients.

Net loss attributable to Unisys Corporation included a non-cash pension settlement loss of $167.2 million related to the purchase of an annuity contract that reduced pension liabilities.

Financial Highlights by Segment

(In millions, except numbers presented as percentages)

 

4Q23

 

4Q22

 

FY23

 

FY22

Digital Workplace Solutions (DWS):

 

 

 

 

 

 

 

 

Revenue

 

$139.2

 

$127.8

 

$546.1

 

$509.9

YoY revenue growth

 

8.9 %

 

 

 

7.1 %

 

 

YoY revenue growth in constant currency

 

6.3 %

 

 

 

7.0 %

 

 

Gross profit

 

$21.3

 

$19.3

 

$76.2

 

$71.5

Gross profit percent

 

15.3 %

 

15.1 %

 

14.0 %

 

14.0 %

 

 

 

 

 

 

 

 

 

Cloud, Applications & Infrastructure Solutions (CA&I):

 

 

 

 

 

 

 

 

Revenue

 

$138.9

 

$138.8

 

$531.0

 

$520.3

YoY revenue growth

 

0.1 %

 

 

 

2.1 %

 

 

YoY revenue growth in constant currency

 

(0.5) %

 

 

 

2.2 %

 

 

Gross profit

 

$22.7

 

$26.4

 

$81.9

 

$47.3

Gross profit percent

 

16.3 %

 

19.0 %

 

15.4 %

 

9.1 %

 

 

 

 

 

 

 

 

 

Enterprise Computing Solutions (ECS):

 

 

 

 

 

 

 

 

Revenue

 

$203.0

 

$225.6

 

$648.0

 

$669.7

YoY revenue growth

 

(10.0) %

 

 

 

(3.2) %

 

 

YoY revenue growth in constant currency

 

(12.2) %

 

 

 

(3.9) %

 

 

Gross profit

 

$136.9

 

$165.4

 

$396.6

 

$432.0

Gross profit percent

 

67.4 %

 

73.3 %

 

61.2 %

 

64.5 %

Fourth Quarter 2023 Segment Results

DWS revenue increased 8.9% YoY, or a 6.3% increase in constant currency. DWS gross profit margin was 15.3%, an increase of 20 bps YoY. The increase in revenue and gross profit margin was primarily driven by New Business with existing clients.

CA&I revenue increased 0.1% YoY, a 0.5% decline in constant currency. CA&I gross profit margin was 16.3%, a decrease of 270 bps YoY, as the prior year quarter gross profit included a benefit from the sale of surplus IP addresses. Full-year CA&I gross profit was 15.4%, up 630 bps, as the result of delivery improvements.

ECS revenue declined in the fourth quarter 10.0% YoY, or a 12.2% decline in constant currency. ECS gross profit margin was 67.4%, a decrease of 590 bps YoY. The decrease in revenue and gross profit margin was primarily driven by the timing of software license renewals, as expected.

Balance Sheet and Cash Flow

(In millions)

 

4Q23

 

4Q22

 

FY23

 

FY22

Cash and cash equivalents

 

 

 

 

 

$387.7

 

$391.8

 

 

 

 

 

 

 

 

 

Cash provided by operations

 

$23.0

 

$34.9

 

$74.2

 

$12.7

Free cash flow

 

$4.0

 

$13.8

 

($4.5)

 

($73.2)

Pre-pension free cash flow

 

$10.7

 

$23.6

 

$43.5

 

($29.5)

Adjusted free cash flow(13)

 

$30.9

 

$39.3

 

$120.5

 

$27.0

Full-year 2023 free cash flow improved by $68.7 million YoY due to improvements in working capital.

Cash and cash equivalents at December 31, 2023 were $387.7 million.

The company continued its pension de-risking strategy during 2023 with the purchase of two annuity contracts relating to its U.S. pension plans. The aggregate purchase price for the two transactions was approximately $516 million, which was funded by plan assets and resulted in a similarly sized reduction in plan liabilities. These actions resulted in non-cash pension settlement losses of $348.2 million.

Other Key Performance Metrics

 

 

YoY
Change

 

QoQ
Change*

 

4Q23

 

 

 

 

 

Pipeline(3)

 

 

 

 

 

Total company

 

(1) %

 

(20) %

 

Ex-L&S pipeline

 

(1) %

 

(20) %

 

TCV

 

 

 

 

 

Total company

 

50 %

 

331 %

 

Ex-L&S TCV

 

137 %

 

339 %

 

FY23

 

 

 

 

 

TCV

 

 

 

 

 

Total company

 

3 %

 

 

 

Ex-L&S TCV