Strategic Update September 2014 Kate Scolnick Vice President, - - PowerPoint PPT Presentation

▶

Aug 15, 2023 184 likes •541 views

Strategic Update September 2014 Kate Scolnick Vice President, Investor Relations Agenda Forward Looking Statement This presentation contains information about Seagate Technology plc (Seagate). Any "forward -looking statement" is

SLIDE 1

Strategic Update

September 2014

SLIDE 2

Kate Scolnick

Vice President, Investor Relations

SLIDE 3

Agenda

SLIDE 4 Seagate Confidential 4 This presentation contains information about Seagate Technology plc (“Seagate”). Any "forward-looking statement" is made only as of the date such information was originally prepared by Seagate and is intended to fall within the safe harbor for forward-looking information provided in the Private Securities Litigation Reform Act of 1995. These forward-looking statements identify prospective information and include words such as "expects," "plans," "anticipates," "believes," "estimates," "predicts," "projects" and similar

expressions. These forward-looking statements are based on expectations, forecasts and assumptions. These forward-looking

statements are also conditioned upon and involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks and uncertainties include a variety of factors, some of which are beyond Seagate’s control. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our ordinary shares include: the actions of securities analysts who initiate or maintain coverage of us; changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates

r the expectations of investors; actions by institutional investors; announcements by Seagate or others and developments affecting

Seagate or speculation or reports by the press or investment community with respect to Seagate or the technology industry in general; changes in operating performance and stock market valuations of technology companies in our industry; and price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole. These forward-looking statements should not be relied upon as representing our views as of any subsequent date and we are not obliging ourselves to revise or publicly release the results of any revision to these forward-looking statements. Factors that can cause results to differ materially include those described in Seagate’s most recent Form 10-K and Form 10-Qs filed with the SEC and contained in this presentation. Historical share price performance is not indicative of future performance. No one can guarantee short-term or long-term performance.

Forward Looking Statement

SLIDE 5 Seagate Confidential 5

Use of Non GAAP Financial Information

To supplement the condensed consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), the Company provides non GAAP measures, including operating expenses and gross margin as a percentage of revenue, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non GAAP financial measures are provided to enhance the user's overall understanding of the Company’s current financial performance and our prospects for the

future. Specifically, the Company believes non GAAP results provide useful information to both management and investors as these non

GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results and because it is consistent with the financial models and estimates published by financial analysts who follow the Company. These non GAAP results are some of the primary measurements management uses to assess the Company’s performance, allocate resources and plan for future

periods. Reported non GAAP results should only be considered as supplemental to results prepared in accordance with GAAP, and not

considered as a substitute for, or superior to, GAAP results. These non GAAP measures may differ from the non GAAP measures reported by other companies in our industry.

SLIDE 6

Steve Luczo

Chairman and CEO

SLIDE 7 Seagate Confidential 7

Long Term Financial Results

FY09 FY14 5-Year CAGR

Exabytes Shipped 50.4 201.2 32% Average Capacity Per Drive 307 GB 915 GB 24% Units Shipped 164 M 220 M 6% Revenue $9.8 B $13.7 B 7% Non-GAAP Gross Margin % 13.9% 28.5% 1500 bps Non-GAAP Net Income ($0.2 B) $1.8 B Non-GAAP Earnings Per Share ($0.37) $5.04 Operating Cash Flow $823 M $2.6 B 25% Capital Expenditures $633 M $559 M (2%)

SLIDE 8

Storage Market Dynamics

SLIDE 9 Seagate Confidential 9

Machine- to-Machine Security Big Data/Analytics

Converging Architectures

Cloud Mobile

Consumerization of IT

IoT Content/Tech

SLIDE 10 Seagate Confidential 10

Economics Changing with Explosive Data Growth

Component Device Systems Data Center At every layer of computing…

SLIDE 11 Seagate Confidential 11

The Seagate Value Proposition

Deep Storage Technology Expertise Expanding into Cloud systems and solutions Resilient Financial Model

SLIDE 12

Dave Mosley

President, Operations and Technology

SLIDE 13

Storage Market Dynamics

SLIDE 14 Seagate Confidential 14

Machine- to-Machine Security Big Data/Analytics

Converging Architectures

Cloud Mobile

Consumerization of IT

IoT Content/Tech

SLIDE 15 Seagate Confidential 15

44ZB

Amount of data will be created

Sources: Reinsel, David. “Where in the World Is Storage: A Look at Byte Density Across the Globe” IDC October 2013, IDC/EMC Digital Universe, April 2014 + Seagate Estimates

The Digital Universe in 2020

13ZB

Amount of data that will need to be stored

6.5ZB

Amount of data that installed capacity will be able to hold

60%

in the cloud

SLIDE 16 Seagate Confidential 16

By 2020 ~60% of storage will be in the cloud

Source: : Gartner

Near Term Exabyte Shipment Forecast

129 189 300 361 465 459 535 681 878 1200 1555 4 6 11 20 33 46 64 88 124 169 225 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Exabytes CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 CY17 CY18 HDD NAND

SLIDE 17 Seagate Confidential 17

Application Workloads Are Changing

Mobile & Video High Performance Computing Big Data Transaction Processing Content Repository

Workloads

Consumer Enterprise

SLIDE 18

Storage Technology Advancement

SLIDE 19 Seagate Confidential 19 Sources: Seagate & Reinsel, David. “Where in the World Is Storage: A Look at Byte Density Across the Globe” IDC October 2013

Application Workloads at the Storage Layer

Hyper Active Inactive

Data

HDD

D R A M

Fast Expensive Small Slow Economical Large N A N D O P T I C A L T A P E

SLIDE 20 Seagate Confidential 20

Next Gen Workloads Require Technology Interlock

100’s 100,000’s 100,000,000’s 1,000,000,000’s

Picoseconds Nanoseconds Microseconds Milliseconds Seconds

HDD DRAM Ops / Second Latency Capacity Cost Highest $/IOPS Lowest $/GB

Big Content Storage Memory Class Compute Storage Cache High Performance

NAND HDD

SLIDE 21 Seagate Confidential 21

20 2020

TERABYTES

AT LEAST…

What the Technology Will Yield

SLIDE 22 Seagate Confidential 22

Shingled Magnetic Recording (SMR)

Areal Density ~1.4 Tb/in2
20% Areal Density increase
ver PMR conventional

recording

Product Integration Complete

Areal Density Roadmap

Two Dimensional Magnetic Recording (TDMR)

Areal Density Up to 1.6 Tb/in2
15%+ Areal Density Increase
ver base recording

technology

Product Integration 2016

Heat Assisted Magnetic Recording (HAMR)

Areal Density ~1.2 - 5.0 Tb/in2
Initial Product Integration 2016

SLIDE 23 Seagate Confidential 23

Storage Component Architecture

CPU DRAM

DDR Bus

PCIe Card

PCIe Bus Storage Bus

SSD Hybrid HDD

SATA, SAS, PCIe…

Compute Storage Controller

SLIDE 24 Seagate Confidential 24

Seagate Technology Platform

Arrays Systems Devices

Traditional Enterprise NAND SAS Hyperscale Desktop Notebook / Tablet Branded Converged Infrastructure NAND SATA NAND PCIe Hybrid Data Systems Software-defined Storage Flash Arrays Hybrid Kinetic

SLIDE 25

Jamie Lerner

President, Cloud Systems and Solutions

SLIDE 26 Seagate Confidential 26

Sustainable Differentiation Joint Innovation Velocity

Market Transitions

Market Transition Customer Driven Product Execution

SLIDE 27 Seagate Confidential 27

Customer Use Cases

HPC/ Big Data/ Analytics Custom Manufacturing Performance Tier Cost & Capacity Optimized JBOD/JROD Backup & Disaster Recovery Multi-Tenant Cloud

SLIDE 28 Seagate Confidential 28

Extending the Core

Arrays Systems Devices

Traditional Enterprise NAND SAS Hyperscale Desktop Notebook / Tablet Branded Converged Infrastructure NAND SATA NAND PCIe Hybrid Data Systems Software-defined Storage Flash Arrays Hybrid Kinetic

Accelerating into a $1 Billion Business

Cloud Systems and Solutions

SLIDE 29

Pat O’Malley

Executive Vice President and Chief Financial Officer

SLIDE 30 Seagate Confidential 30

Seagate’s Core Business

Deep technical expertise Extensive go-to-market capabilities Resilient financial model

Enabling Seagate to capture new adjacencies in an efficient manner

SLIDE 31 Seagate Confidential 31

$2 Billion dollar revenue run rate for cloud and flash platform business ~24 months Accretive to Corporate Non GAAP Gross Margins in FY16 Accretive to Corporate Non GAAP Operating Margin in FY17

Growth From Market Adjacencies

SLIDE 32 Seagate Confidential 32

FY 15 Model Summary

Financial Model Assumptions Revenue Growth 3 – 5% Non GAAP Gross Margin 27 – 32% Non GAAP Operating Expenses 13 – 15% Non-GAAP Operating Margin 13 – 15% Capital Expenditures 6 – 8% FY15 Capital Deployment Assumptions Dividends $550M +10% increase Share Redemptions Value-driven Debt Retirement Opportunity Dependent M&A/Strategic Investments Opportunity Dependent

SLIDE 33 Seagate Confidential 33

FY 17 Model Summary

Financial Model Assumptions Revenue Growth 6 – 8% Non GAAP Gross Margin 27 – 32% Non GAAP Operating Expenses 12 – 14% Non-GAAP Operating Margin 13 – 15% Capital Expenditures 6 – 8%

SLIDE 34 Seagate Confidential 34

The Seagate Value Proposition

Deep Storage Technology Expertise Expanding into Cloud systems and solutions Resilient Financial Model

SLIDE 35

Q&A