Shaping Connections Investor Presentation January 2018 1 Confidential & Proprietary Confidential & Proprietary
Forward Looking Statements Cautionary Note Regarding Forward-Looking Statements This document contains certain “forward-looking statements.” All statements other than statements of historical fact are “forward-looking” statements for purposes of the U.S. federal and state securities laws. These statements may be identified by the use of forward looking terminology such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," “our vision,” "plan," "potential," "preliminary," "predict," "should," "will," or “would” or the negative thereof or other variations thereof or comparable terminology and include, but are not limited to, statements regarding, expected investment, savings and growth opportunities. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond its control. These factors, including, but not limited to timing of effectiveness of our registration statement, and those risks discussed in the Company’s Registration Statement on Form 10, as amended, may cause its actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. For a further list and description of such risks and uncertainties, please refer to the Company’s filings with the SEC that are available at www.sec.gov. The Company cautions you that the list of important factors included in the Company’s SEC filings may not contain all of the material factors that are important to you. In addition, in light of these risks and uncertainties, the matters referred to in the forward- looking statements contained in this report may not in fact occur. The Company undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. This presentation should be read in conjunction with our fourth fiscal quarter 2017 earnings press release posted on December 22, 2017. Within this presentation, we refer to certain non ‐ GAAP financial measures that involve adjustments to GAAP measures. Reconciliations between our non-GAAP financial measures and GAAP financial measures are included on our website at investors.avaya.com. The financial information in this presentation includes financial information that is not presented in accordance with generally accepted accounting principles (“GAAP”). We refer to these measures as “non-GAAP financial measures”. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under GAAP. “EBITDA” in this presentation reflects Adjusted EBITDA (as defined in Company filings and earnings releases) further adjusted to exclude OCI addback and Pension/OPEB/LTD/FAS 112 expense; this adjustment is utilized to exclude the non-operational / non-cash impact of pension-related items. Based on the aforementioned definition, “EBITDA” in this presentation is analogous to the “Adjusted EBITDAP” metric as presented in the Amended Plan Disclosure Statement (Exhibit F) and Avaya’s prior 8-K filings. Certain information contained herein has been derived from sources prepared by third parties. While such information is believed to be reliable for the purposes used herein, none of the Company, its affiliates, nor its or their respective directors, offices, employees, members, partners, shareholders or agents makes any such representation or warranty with respect to the accuracy of such information. These slides, as well as current and historical financial data are available on our website at investors.avaya.com None of the information included on the website is incorporated by reference in this presentation . 2 Confidential & Proprietary
Avaya is a Leading Global Provider of Communication Software & Services Market Leadership Best-in-Class Business Model Predictability, Profitability & Growth #1 #2 $3.3bn 78% 56% 25% Contact Unified Communications and FY17 Revenue Software & Services Recurring Revenue EBITDA Margin Center (“CC”) Collaboration (“UC&C”) Source: Company Filings, Avaya Management, Canalys, Dell’Oro Group Note: Financials based on full-year FY2017 figures. 3 3 Confidential & Proprietary Confidential & Proprietary
Market Leadership Market Leader Largest pure-play integrated UC&C/CC player Larger than next 5 competitors Strong Financials Go To Market New capital structure Global Reach – 100+ countries 25% EBITDA margins SMB, Midmarket & Enterprise Balance sheet 6,300 channel partners flexibility 1,800 sales professionals >$500mm liquidity Leader in R&D/ Customer Support Innovation 4,800 patents Excellence 1,400 customer support and 1,800 R&D professionals 1,000 professional services & implementation employees $200mm+ in R&D spend Best-in-class net promoter 15 innovation centers scores worldwide 70 new product Largest Installed Base launches in FY2017 139mm UC&C lines (32% share) 5.5mm CC users (33% share) 130k customers 3mm cloud seats 4,000+ new accounts in FY2017 90% of Fortune 500 Source: Company Filings, Avaya Management 4 Confidential & Proprietary
Investment Highlights Avaya Has a Predictable and Profitable Business Model and is Positioned for Growth 1 Proven Management Team Positioning Avaya for the Future 2 Market Leader Delivering the Most Reliable, Mission Critical and Scalable Solutions Around the World 3 End-to-End Offering for the Future of CC and UC&C 4 Avaya is Poised to Benefit from Market Evolutions 5 Operational & Financial Strength Support Foundation For Growth and Excellence 6 Large Market in Early Innings of Cloud Transition 7 Continued Track Record of Innovation and Product Development 8 Strong Financial Profile and Capital Structure Support Investments for Growth 5 Confidential & Proprietary
Proven Management Team Positioning Avaya for the Future 1 New Management Team Approach to Operating Model JIM PAT LAURENT JERRY CHIRICO PHILONENKO GLEMBOCKI O’MALLEY President SVP SVP, SVP, Solutions and and CEO and CFO Operations Technology MERCER NIKOS SHEFALI ROWE NIKOLOPOULOS SHAH SVP and General SVP, Chief Administrative Manager, Cloud Strategy and Corporate Officer, General Development Counsel Deep Industry, Execution and Transformation Experience 6 Confidential & Proprietary
Market Leader Delivering the Most Reliable, Mission Critical and 2 Scalable Solutions Around The World >130k Customers 10 OF THE 10 10 OF THE 10 10 OF THE 10 Top Investment Top Auto Largest Airlines >90% of the Fortune 100 Services Companies Manufacturers Government Agencies in >40 Countries 10 OF THE 10 10 OF THE 10 10 OF THE 10 >6,300 Channel Partners Top Insurance Leading Hotel Major Banks Companies Groups¹ Source: Company Filings, Avaya Management 1 Based on Fortune 500. 7 Confidential & Proprietary
Avaya is Positioned for Growth in CC 3 Contact Center Solutions CC Growth Drivers Global CC market valued at $25B growing +4% per annum Global CC market valued at $25bn growing +4% * Avaya Private Avaya is a leader in CC Infrastructure technology (automatic call distribution & routing) Cloud CCI & Services Market: $17bn, stable / +1-2% annual growth Premise-based revenues declining -10%/annum in SMB segment as cloud deployment begins to accelerate, but Midmarket and Enterprise have not yet moved to cloud Move to Private and Public Cloud (CCaaS) market $2.5B+ growing 25% per annum Move to Private and Public Cloud (CCaaS) market: $2.5bn+ growing 25%* Avaya well-positioned with private cloud solutions: ~ 500K CC seats under management (10% of CC customer seats). Migration opportunity for Avaya’s 5mm CC premise seats Digital Channels and Omni-Channel Solutions in CC Stack $3B, gr owing +10% Digital and Omni-Channel Solutions in CC Stack $3bn, growing 10%+* Elite Multichannel, and new product introductions: Oceana (Omni-Channel, Analytics) and Breeze Products addressing high-growth segment of the market Workforce Optimization Solutions Analytics, Automation and Intelligent Systems $2.5B growing 10%+/annum Analytics, Automation and Intelligent Systems $2.5bn growing 10%+* Avaya is re-positioning investment from premise based solutions to cloud solutions focused on Real Time Analytics, Agent Productivity, Customer Journey, CC automation (e.g., Chatbots) and Intelligent Systems driven by Artificial Intelligence, Machine Learning, Natural Language Processing, and IOT * Source: Avaya Market Data 8 Confidential & Proprietary
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