CEO Presentation - Symantec

Symantec’s 2015 Financial Analyst Day
April 17, 2015
Welcome Helyn Corcos
Vice President, Investor Relations
STRATEGIC HIGHLIGHTS
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Forward Looking Statements This presentation contains statements regarding our projected financial and business results, which may be considered forward‐
looking within the meaning of the U.S. federal securities laws, including statements regarding our financial guidance and targets (as a
combined company and by business segment); our proposed separation into two publicly traded companies; the projected market
growth rates and margin expansion opportunities for the security business and the information management business; statements
regarding our competitive advantages in security and information management; statements with respect to the proposed timing of
the separation; and statements with respect to proposed capital allocation strategies for both Symantec and Veritas. 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 presentation. Such risk factors
include those related to: risks related to the separation of the company into the security business and the information management
business; general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market
segments, particularly with regard to security and information management; the competitive environment in the industries in which
we operate; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange
rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products; 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 presentation. 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 and our Form 10‐Q for the
quarter ended January 2, 2015.
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.
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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. 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 www.symantec.com/invest.
Reconciliations for our financial results and guidance can be found on Symantec’s investor relations website.
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STRATEGIC HIGHLIGHTS
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Definition of Terms Used Throughout Presentation
• We are reiterating our 4Q and FY15 guidance today based on a FX rate of €/$1.16. The weighted average FX for 4Q15 was €/$1.12 & the end of period FX was €/$1.10 vs €/$1.16 guide.
• Growth rates and operating margin expansion for FY15 are expressed in constant currency and are based on 3 quarters of actuals and the midpoint of 4Q15 guidance.
• Growth rates and operating margin expansion for FY16 are expressed in constant currency at an exchange rate of €/$1.13 and excludes the effect of the 14th week in the June 2014 period (i.e., revenue of $113M and operating expense of $51M have been removed).
• Legal Separation of our information management business is expected on January 2, 2016 (i.e., the first day of 4Q16) with trading to commence on January 4, 2016.
• Pre‐Separation –
–
–
–
Veritas refers to the Information Management segment
Norton refers to the Consumer Security segment
Symantec Security refers the Enterprise Security & Consumer Security segments Symantec refers to the combined company until separation • Post‐Separation –
–
–
–
Veritas refers to the Information Management business
Symantec Security refers to the Enterprise Security & Consumer Security businesses
Symantec is a pro forma combined view of all three businesses
The information management business will be presented as discontinued operations in Symantec’s financial statements commencing in 4Q16
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2015 FAD Agenda
Speaker
Topic
Michael Brown
Unlocking Value through Focus & Growth
John Gannon & Matt Cain
Veritas Strategy & Products w/Q&A
10:25 am ET – 10 minute Break
Fran Rosch
Consumer Security Strategy w/Q&A
Jeff Scheel, Balaji Yelamanchili & Amit Mital
Enterprise Security: Markets, Strategy & Products w/Q&A
12:35 pm ET – 15 minute Break
Thomas Seifert
Unlocking Our Growth Opportunity
Michael Brown & Thomas Seifert
Final Q&A
Michael Brown
Closing Remarks
2:00 pm ET – Reception & Demos 6
STRATEGIC HIGHLIGHTS
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Unlocking Value Through Focus and Growth
Michael Brown
President and Chief Executive Officer
Agenda 1
Focus Drove FY15 Progress
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Market Dynamics
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Veritas and Symantec Security Strategies
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Leveraging Our Scale to Drive Innovation
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Accelerate and Unlock Value in FY16‐17
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STRATEGIC HIGHLIGHTS
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Focus Drove FY15 Priorities
Growth
Margin, Cash Flow & Operational Focus
Reduce costs and improve efficiencies across company
Optimize our businesses based on lifecycle and growth potential
Talent
Strengthen leadership team
Return significant cash to shareholders
New Product Delivered
Strategy & Separation
Prioritize investments for growth in our enterprise businesses
In review as year began
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Focus Drove FY15 Progress
Growth
Margin, Cash Flow & Operational Focus
Margin expansion
3%
Implied billings growth in FY151
30%
53%
Total company2
Norton2
Talent
Deferred revenue growing again (after 6 quarters)
5%
Veritas revenue accelerating from 0% to 5%3
Return to shareholders
~$900M
Products Delivered
Strengthened the leadership team with
5
new executives
41
Enterprise security products delivered
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8 Revenue and efficiency initiatives drove >$150M
Strategy & Separation
Veritas products delivered
1. Adjusted for FX and extra week in the June 2014 quarter; growth based on midpoint of FY15 guidance.
2. As of 3Q15.
3. Growth rates at constant currency; year over year growth in 1Q15 and 3Q15.
STRATEGIC HIGHLIGHTS
Manage our business as a portfolio
Launched Norton Security subscription
2 clear strategies => separation
Increase focus, reduce complexity and enhance strategic flexibility
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Market Dynamics Driven by Different Trends & Customer Needs
Security
Information Management
40%
23%
Complexity increase in Increase in enterprise breaches
of threats
targeted attacks
1M
Exponential data growth driven by mobile, virtualization & hybrid clouds New threats created per day
Overwhelmed with volume of alerts
CISO
CISOs are primary buyers
Customer focus on reliability & lower TCO
CIO
CIOs are primary buyers
Shorter selling cycles
Longer selling cycles
Need for actionable, intelligent
security solutions
Complexity in managing information; increased information fragmentation
Large and Growing Markets Driven by Large and Growing Markets Driven by Evolving Threats
Exponential Information Growth
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Veritas | OUR UNIQUE ASSETS
CUSTOMERS
HETEROGENEITY
86% of Fortune 500 choose Veritas solutions
Unparalleled breadth of multiple vendors’ platforms and clouds
SCALE
UNMATCHED BACKUP
APPLICATION‐
AWARENESS
MORE DATA ABOUT DATA
Unique platform of #1 backup SW and leading appliance
IT service continuity beyond just infrastructure
Rich repository of detailed metadata and insight
86%
Largest, most complex companies feeding the Fabric
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STRATEGIC HIGHLIGHTS
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Veritas | PRODUCT STRATEGY
Expand best‐in‐class Foundational portfolio Deliver next‐generation Availability solutions Enable next‐generation
Insight solutions • Expand across backup, storage management, business continuity, archiving and eDiscovery.
• Focused on managing and moving mission‐critical data in a hybrid cloud world. • Provide visibility, action, and automated control across an organization’s information landscape.
• Deliver capabilities via software, integrated appliances or cloud.
• Deliver through a coordinated orchestration architecture.
• Deliver through an intelligent information fabric that integrates our portfolio and third‐party ecosystems.
Our Competitive Advantage: Heterogeneity & Scale
Make every byte of data actionable by ensuring availability and revealing insights
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Symantec Security | OUR UNIQUE ASSETS
endpoints
175M 42M attack sensors in 157 countries
63M users & 4M SMBs
6.8M mobile devices protected
3.7T
30% of world’s enterprise 500+
rows of telemetry
email traffic scanned/day
threat & response team 100 Billion 1.8 Billion 9
more/month
web requests
global threat response centers
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STRATEGIC HIGHLIGHTS
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Symantec Security Strategy Leverages Unique Assets
Best‐in‐Class
Security Products
• Consumer
Unified Security Analytics Platform Cyber Security Services • Full‐suite of services
• Security Big Data Analytics
– Norton Security
• Unparalleled scope of telemetry (Symantec and 3rd Party)
• Enterprise
– Symantec Threat Protection • Unrivalled visibility into real‐
time global threats – Symantec Information Protection
• Powers Symantec and 3rd party security analytics applications
– Monitoring services
– Incident response services
– Threat intelligence services
• Supported by 500+ world‐class cyber security experts and
9 global threat centers
Our Competitive Advantage: Global Scale & Real‐Time Visibility
We see more, analyze more, and therefore protect
from more cyber threats than any other company in the world
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Drivers to Accelerate Growth & Unlock Value for FY16‐17
Security
Information Management
10% CAGR in addressable security market
7% CAGR in addressable market
Shifting & increasing R&D to growth markets
Shifting & increasing R&D to growth markets
Increase in NEW security offerings in FY16 3 new ATP offerings 2 new Cyber Security services
2 new Security Analytics applications
14 foundational products; 3 new offerings
Deliver intelligent information fabric layer
Norton subscription traction
40% increase for enterprise security quota CISO
carrying reps; 1,750 dedicated security sales professionals
CIO
20% increase for quota carrying reps;
2,100+ dedicated sales professionals
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STRATEGIC HIGHLIGHTS
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Unlocking Value through Focus and Growth
Focus drove our expanded operating margin & investments for growth in FY15
Global scale & real‐time visibility
drives enterprise security growth & mitigates Norton decline
Leverage our scale & unique assets to drive differentiated offerings in FY16‐17
Differentiated approach
of Availability & Insight
drives growth 17
STRATEGIC HIGHLIGHTS
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