Symantec at Morgan Stanley Technology, Media & Telecom Conference
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Symantec Widescreen Event Template 1 Symantec 4.0 Steve Bennett President and Chief Executive Officer Morgan Stanley Conference February 27, 2013 Welcome to the unveiling of Symantec 4.0… this is a day that we’ve been working hard towards and really looking forward to Fellow members of the Office of the CEO… Since day 1 I shared that we were starting with a clean sheet of paper and examining all the options about the best way to create shareholder value… outside advisors… all options… in parallel we began a transformation strategy project with a different outside firm… board meeting in early January… decision… 5 and 30 plan is best way to grow shareholder value 1 Forward Looking Statements 2 This presentation contains statements regarding our intention to execute a new strategy, implement operational and organizational changes and our projected financial and business results, as well as our intention to return cash to shareholders through dividends and continued share buyback activity, which may be considered forward‐looking within the meaning of the U.S. federal securities laws. 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: 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; fluctuations in currency exchange rates; 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 presentation. Additional information concerning these and other risk factors is contained in the Risk Factors section of our Form 10‐K for the year ended March 30, 2012 and in our Form 8-K filed on June 11, 2012. Any information regarding pre-release 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. You’re all aware that we’ll be making several forward looking comments about products and financials through out this presentation. Please refer to our risk and uncertainty comments in our SEC filings. 2 Use of GAAP and Non-GAAP Financial Information 3 Our results of operations have undergone significant changes due to a series of acquisitions, the impact of SFAS 123(R), 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 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 is attached to the financial review presentation, and which can also be found, along with other financial information, on the investor relations page of our website at www.symantec.com/invest. As you know, we refer to both GAAP and Non-GAAP metrics when describing our financial information, so please take a look at our reconciliation statement on the website. 3 Background and Strategic Implications 4 Strong Assets No Strategy Siloed Org Poorly Run New Control Points Keep Emerging… Customers’ Needs Are Not Being Met Gordon, John and Enrique 1.0, 2.0 and 3.0 built an incredibly strong set of assets we will use as our foundation to solve important customer problems and drive faster organic growth… and I thank them for that. We have deep expertise and capability in both security and information management we can deploy in new ways to solve important customer problems. We will also share some insights on the synergies between these areas given where the market is going and the customer problems we see. Those before me built a portfolio of leading point solution products and services…. leadership in 9 Gartner magic quadrants… DLP is a very critical and fast growing market and our share is larger than the next 3 competitors combined… World leader in backup and availability… protect more than 50% of the world’s information…. We are a little worried about the other half Great portfolio of brands, reach and a very large installed base… over 175M Norton customers… a presence in 98% of the Fortune 100 companies… including 93 of the top 100 financial institutions. So with such great assets… why have we been underperforming… in simple terms we lacked clear strategy and operational plan that focused on delivering value to our customers This is where my background and training at GE and Intuit will help… we need a healthy dose of the strategic and operational rigor from GE plus the customer driven innovation from Intuit. 4 Focused on 3 Things… Execution and Change Management 5 Products and Services GTM and Global Strategy People and Organization Thoughtful Approach to Changes… Timing Very Important Products and services… Holding company of individual point solutions built primarily from acquisition… while the individual point solutions add a tremendous amount of value to customers… the whole isn’t much better than the sum of the parts and that there was a large opportunity to change that to add a lot of additional value for customers Technical support GTM and global strategy System… strategy and processes… despite having a lot of hard working and talented people is not producing high quality results Hard to do business... lots of complexity… multiple sets of T’s and C’s Thought an acted like a US company with global distribution. People and organization… People... working hard and losing... demoralized… talented but not engaged Silo’d management and structure... not a team Inadequate systems and infrastructure Company of promises... or maybe better said of unfulfilled promises When I got off the bench to take this job I believed Symantec had strong assets and lots of opportunities… but was underperforming against the opportunity… I can tell you emphatically that my learning journey confirmed this and the opportunity we have is much bigger than I originally thought Nice tailwinds Markets are growing strongly and that growth is expected to continue Customers and partners want and need us to win... Talented and now engaged workforce that wants to be part of transforming Symantec 5 Offerings… Making Point Solutions Even Better Norton 360 Norton Mobile Security Norton Data Services Endpoint Protection Enterprise Mobility Endpoint Encryption User Authentication User Productivity & Protection Information Security Information Management: Availability & Scalability 6 Managed Security Services Data Loss Prevention Mail and Web Security O3 Control Compliance Suite Critical System Protection Trust Services Storage Foundation HA NetBackup Enterprise Vault/eDiscovery Backup Exec BE.cloud FileStore Portfolio of Leading Products Point Products… Invest Based on Opportunity Consolidate or Divest Assets as Required We Will Deliver New Integrated, Modular Offerings Over the Next 6-24 Months User Productivity & Protection Information Security Information Management: Availability & Scalability 7 New Higher-Value Offerings Mobile Workforce Productivity Norton Protection Norton Cloud Information Security Service Identity/Content-aware Security Gateway Data Center Security Business Continuity Integrated Backup Cloud-based Info Management Object Storage Platform Enables authorized users to access corporate resources from any corporate or personal mobile device, PC or Mac while protecting data, applications, devices and identities 8 New Higher-Value Offering: Mobile Workforce Productivity Employee Owned/BYOD Corporate Owned Enterprise Applications Cloud Services Endpoint protection Corporate Personal Mobile device management Mobile container Mobile application Management Enterprise app store Endpoint encryption Endpoint DLP User authentication Integrated Solves an important customer problem and builds competitive advantage 9 New Higher-Value Offering: Business Continuity Applications Platforms Storage Windows Backup Unix/Linux Backup Virtual Backup Clustering Virtual HA Replication Disaster Recovery Service Orchestration Integrated Solves an important customer problem and builds competitive advantage Delivers high availability, performance, and scalability for business applications in virtual, private cloud environments 10 Provides visibility into, and comprehensive protection from, advanced threats leveraging Symantec and 3rd-party products New Higher-Value Offering: Information Security Service Enterprise Apps Symantec Security Offerings 3rd-Party Products and Tools Symantec Global Security Intelligence Network Analysis Correlation Visibility Dashboard Threat Detection Prioritization and Workflow Incident Management Risk Management Integrated Solves an important customer problem and builds competitive advantage 11 Applied “Right for GEO” manner Customer Segment Commercial Norton Consumer and Small Business Enterprise Global & Enterprise… Symantec direct + Customer led channel involvement Channel-led… dedicated Symantec team support Combination of direct through e-business and channel-led Simplified Go-to-Market (GTM) Strategy Global Dramatically simplified and clarified… The biggest change is the addition of a focus on the four vertical markets… markets where we need tailored needs to meet their needs Examples… Telcos or ISP’s around the world want to have a relationship with us that integrates what we do into the service bundle they sell to their consumers and small businesses… in some cases larger enterprise businesses…. Our silo’s of the past structure made that very hard to do… this will make a big difference in strengthening our offerings and focus on these verticals… to better meet their needs and drive faster organic growth… SI’s XAAS… National public sector 11 12 Expanded high quality/ lower cost models Telesales e-Business In product New business growth Field paid only on new over time Separate renewals org New global sales and partner enablement organization New Marketing and Sales Capabilities New, enhanced partner program More selective based on capabilities Better enablement & Symantec support New performance-based incentives Expanded Marketing Total customer experience New centers of excellence Strategic Pricing & Licensing Offerings Customers Beyond Current Point Products to Integrated Offerings Beyond Short-Term Bookings to Lasting Customer Value Organization Simplification Initiative 13 Addressing spans and layers 3 waves Completed by June Key thoughts are… organize the company around the higher order customer jobs and where the puck is going not where it used to be Drive more functional focus, expertise and accountability so we can accelerate our capabilities on the areas that drive organic growth… My judgment is that we couldn’t get the pace of change we needed in a silo’s business unit structure This is an interdependent organization… where teamwork really matters… that’s my style and that’s the way we are going to run the company… starting in the office of the CEO where we all have complementary skills and are already working very well together In addition to continuing to focus on strengthening our talent and leadership and capabilities that will contribute to improved organic growth… a big priority is to minimize execution risk 13 Financial Objectives 14 Organic growth story Planning for 5 quarters of transition Operating margins grow 200 bps next 2 years Return cash to shareholders Over time, return 50% as a dividend and 50% via buybacks Initiating a dividend with a targeted yield of 2.5 % in 1Q14 Key thoughts are… organize the company around the higher order customer jobs and where the puck is going not where it used to be Drive more functional focus, expertise and accountability so we can accelerate our capabilities on the areas that drive organic growth… My judgment is that we couldn’t get the pace of change we needed in a silo’s business unit structure This is an interdependent organization… where teamwork really matters… that’s my style and that’s the way we are going to run the company… starting in the office of the CEO where we all have complementary skills and are already working very well together In addition to continuing to focus on strengthening our talent and leadership and capabilities that will contribute to improved organic growth… a big priority is to minimize execution risk 14 15 Q&A 15 16 Thank You