Investor deck for website 5-16-14 v4


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Investor deck for website 5-16-14 v4

  1. 1. 1 Investor Presentation May 2014
  2. 2. Forward Looking Statements This presentation contains statements regarding our financial and business results and business strategy, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including projections of future revenue, operating margin and earnings per share, projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges, operating margin expansion and future return of capital to shareholders. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; our ability to reduce our operating expenses; fluctuations in currency exchange rates; our actual effective tax rate in future periods; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward- looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended March 28, 2014. Any information regarding pre-release of Symantec offerings, future updates or other planned modifications is subject to ongoing evaluation by Symantec and therefore subject to change. This information is provided without warranty of any kind, express or implied. Customers who purchase Symantec offerings should make their purchase decision based upon features that are currently available. We assume no obligation to update any forward‐looking information contained in this presentation. 2
  3. 3. Use of GAAP and Non-GAAP Financial Information Our results of operations have undergone significant change due to a series of acquisitions, the impact of stock-based compensation, impairment charges and other corporate events, including the impact on revenue of the ongoing investigation into Symantec’s compliance with certain provisions of its 2007 GSA contract. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which can be found, along with other financial information, on the investor relations’ page of our website at 3
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  5. 5. Protects more than 1 billion systems Secures 8 billion email messages and 1.4 billion web requests a day Ninety-nine percent of Fortune 1000 companies are Symantec customers The largest backup and recovery company on the planet 5 Operates the largest civilian threat intelligence platform in the world
  6. 6. Investment Thesis • Improve growth profile and increase profitability to create shareholder value • Strong cash flow generation and balance sheet to allocate towards growth initiatives • Continuing to return significant cash to shareholders with 90% of FCF returned through dividends and buybacks in FY14 • Market-leading brands across security and information management for the endpoint and data center • Serving global base of customers from consumers to large enterprises and governments • Operating in vibrant and growing markets – mobile, cloud, appliances, backup, DLP, MSS, and authentication 6
  7. 7. Progress Achieved in FY14 • Delivered revenue at the high end of guidance and exceeded guidance on operating margin and EPS • Implemented the right changes to our go-to- market capabilities • Salesforce building pipelines and relationships drove improvement in new business, renewals, and Y/Y billings trends in each of the past 2 quarters as expected • Reduced costs resulting in improved operating margin of 160 bps with path to further expansion ahead 7 4Q14 FY2014 Non-GAAP Revenue1 $1,650 $6,701 Deferred Revenue $3,903 $3,903 Non-GAAP Operating Margin1 27.3% 27.5% Non-GAAP EPS1 47¢ $1.92 -16% -9% -3% -20% -16% -12% -8% -4% 0% $1.60 $1.62 $1.64 $1.66 $1.68 $1.70 $1.72 2Q14 3Q14 4Q14 ImpliedY/YBillingsGrowth $inbillions Revenue Implied Y/Y Billings Growth 1Non-GAAP financial measure. See for a reconciliation to the applicable GAAP financial measure
  8. 8. 1Q15 and FY15 Guidance • Expect revenue to grow during 2H15 driven by improved direct and renewal sales activity, benefits from channel programs and new product launches • Expect to hit 30% non-GAAP operating margin by 4Q15 by implementing efficiencies • Expect Y/Y billings growth to return in 2Q15 one year since reorganizing salesforce and billings to grow at moderate rate during 2H15 8 1Q151 FY20151 Revenue $1,650 - $1,690 $6,630 - $6,770 Non-GAAP Operating Margin2 24.1% - 24.5% 27.7% - 28.2% Non-GAAP EPS2 41¢ - 43¢ $1.84 - $1.92 1Guidance as of May 8, 2014 2Non-GAAP financial measure. See for a reconciliation to the applicable GAAP financial measure
  9. 9. Identified Five Priorities 9 Optimize Our Businesses Based on Lifecycle & Growth1 Prioritize Investments for Growth2 Further Reduce Costs and Improve Efficiencies3 Round Out Our Executive Team4 Return Significant Cash to Shareholders5 • Taken steps to strengthen the company and accelerate the pace of our transformation • Several opportunities to improve our growth profile, maximize profitability, and create value
  10. 10. • ~$650M business • High margin business • Lower growth potential • Includes Storage Foundation and Cluster Server #1 – Optimize Our Businesses Based on Lifecycle & Growth 10 Information Availability • Highly profitable ~$2B business in a mature, low growth market • Forming a business unit under Fran Rosch • Enhancing franchise value while improving margin and cash generation through more focused leadership • Examples include: – Reducing 7 products to 2, to simplify customer purchase and renewal decisions – Optimizing eCommerce direct to consumer channel Norton • Methodically evaluating every product line to balance profitability against growth • Some businesses are ideal for improving operating margin while others are best positioned for growth • Proactively optimizing more mature, lower growth potential businesses to expand operating margin • Deploy savings and prioritize investments against growth objectives in enterprise areas
  11. 11. #2 – Prioritize Investments for Growth 11 • Accelerate growth through prioritizing investments in backup, storage management and security • Shifted resource funding in R&D budget to put more dollars behind the most promising market opportunities • Market leader with 30% market share in backup, according to IDC • Growth has outpaced market over past few years • NetBackup appliance is one of our fastest growing businesses, up 27% Y/Y • Bringing differentiated appliances to market • Investing in what we anticipate will be multi- billion dollar markets: – Software defined storage – Object storage – DRaaS Backup Storage Management • Expanding from “prevention” to “detection & response” to solve the advanced threat detection problem in a differentiated way • Mobile is up 76% Y/Y • Seeing growth in Trust Services, DLP, & MSS • Launching an ATP service to connect endpoint security to third party gateways through MSS • Introducing Synapse, which integrates telemetry data across endpoints, gateways, & email to reduce false positives & operating costs for customers Security
  12. 12. Product Delivery for FY15 12 • Released NBU, the only backup product designed for enterprise level scale, which can accommodate hundreds of thousands of virtual machines and petabytes of data while giving customers 400x faster recovery • Released Storage Foundation, which includes disruptive new capability that abstracts in-server memory, allowing the sharing of flash storage across servers without the need for expensive storage hardware Backup Storage Management • Released mobile workforce productivity, which integrates application & device management capabilities into a holistic solutions for the enterprise Security • Releasing: – Appliances – Backup Exec 2014 – Enterprise Vault 11.0 • Releasing Disaster Recovery Orchestrator to MSFT Azure • Launched MSS ATP service • Will be offering ATP solution • DLP & mobile security integration in Mobile App Center • Extending DLP by tiers, reducing its footprint & making it more cost effective • Extending capabilities of Secure Gateway; including ATP in SEP • Releasing Data Center Security & Data Insight 5.0 2H14FY15 12
  13. 13. #3 – Further Reduce Costs and Improve Efficiencies 13 • We’ve identified 8 new initiatives to further optimize our cost structure, improve efficiencies across the company and drive higher revenue • Increase R&D efficiencies • Improve new business & renewal productivity • Optimize economics of channel programs • Rigor on license compliance • Pricing optimization Efficiency Improvements • Consolidation of our global footprint • Reduce number of data centers • Streamline product support Cost Reductions
  14. 14. #4 – Round Out Executive Team • We have a team of talented business & technology leaders • We continue to round out our executive team • We are running an active search for a Chief Products Officer • The board is leading an active process to find a permanent CEO – We’ve retained Russell Reynolds as our executive search firm • The board’s ideal candidate will have the following attributes: – Understanding of the technology landscape – Expertise growing a multi-product business at scale – Strong record of collaborative leadership 14
  15. 15. #5 – Return Significant Cash to Shareholders • Over the past 10 years, we’ve repurchased over $10 billion of our shares • In FY14, we returned 90% of our free cash flow, or $918 million, to shareholders • In FY15, we expect to return significant cash to shareholders of approx. $900 million in the form of dividends and share buybacks 15 Returned >$10B to Shareholders Since FY05 $192 $3,628 $2,846 $1,500 $700 $553 $870 $893 $826 $918 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 $inmillions Dividends Buybacks
  16. 16. Capital Allocation Strategy • Our long-term objective is to return approximately 50% of free cash flow to shareholders through dividends and share repurchases – Substantial cash flow generation – About 40% of cash is held onshore • Strong balance sheet and financial flexibility – $2.1 billion in investment grade debt • Investments in technology acquisitions that complement products • Allocate resources to growth areas such as cloud, mobile and appliances 16
  17. 17. 17 We make the world a safer place by helping people, businesses, and governments protect and manage their information, so they can focus on achieving their goals.
  18. 18. 18 Contact Investor Relations Helyn Corcos Vice President (650) 527-5523 18