Download Finance Efficiency Business Insight

IBM Institute for Business Value
CFO Summit – 2011
April 26th, 2011
Ludek Rainet – IBM RCIS CFO
© 2010 IBM Corporation
IBM 2010 CFO Study
2
© 2010 IBM Corporation
Introduction
The 2010 IBM CFO Study is the fourth edition since 2003 and builds
upon our primary research from 2005 and 2008
CFO Studies
2003
3
2005
2008
2010
© 2010 IBM Corporation
Introduction
The study examines how the CFO can make the enterprise smarter
in an era of increased uncertainty
CFO Study 2010 Provocative Topics
!
The impact of the New Economic Environment on the
CFO’s role
?
What Finance model achieves the optimal mix of
capabilities needed to outperform?
?
What can CFOs do to enable timely and informed
decision-making?
?
How can the CFO help the enterprise anticipate and
shape its environment?
Source: IBM Institute for Business Value, The Global CFO Study 2010
4
© 2010 IBM Corporation
Introduction
Finance needs to improve its effectiveness in order to deliver on the
enterprise agenda
Importance
Effectiveness
CFO Agenda: Importance vs. Effectiveness
Rank
Gap
Developing your people in the Finance
organization
Executing continuous Finance process
improvements
Core
Finance
59%
Driving integration of information across
the enterprise
3
Driving enterprise cost reduction
51%
20%
40%
34%
77%
62%
0%
9%
80%
52%
Supporting / managing / mitigating
enterprise risk
Measuring / monitoring business
performance
28%
16%
75%
73%
39%
Providing inputs into enterprise strategy
2
35%
52% 61%
Driving Finance function cost reduction
Enterprise
Focused
83%
55%
Strengthening compliance programs
and internal controls
1
84%
49%
28%
26%
85%
59%
80%
60%
80%
23%
21%
100%
N = 1,834 Note: Executives asked: How important to your Finance organization are each of following areas of responsibility? and How effectively do you think your Finance organization
is performing in each of those areas? And Please rank your top 3. Importance defined as enterprises selecting [5] Critical and [4] on a 5-point scale where [5] Critical and [1]
Unimportant. Effectiveness defined as enterprises selecting [5] Very Effective and [4] on a 5-point scale where [5] Very Effective and [1] Ineffective
Source: IBM Institute for Business Value, The Global CFO Study 2010
5
© 2010 IBM Corporation
Introduction
Enterprise focused activities have accelerated in importance for
CFOs over the past five years – some dramatically
Importance of Enterprise Focused Activities Over Time
84% 85%
80%
109%
increase
increase
80%
77%
73%
71%
69%
93%
73%
66%
62%
61%
56%
40%
35%
Measuring /
monitoring
business
performance
Providing inputs Driving enterprise
into enterprise
cost reduction2
strategy1
2005
2008
Supporting /
managing /
mitigating
enterprise risk
Driving integration
of information
across the
enterprise
2010
2005: N = 844, 2008: N = 1,195, 2010: N = 1,904
Note: 2005 uses “High” importance, 2008 uses [5] Critical and [4] Important and 2010 uses [5] Critical and [4] which indicates moderately critical
Note: Defined as enterprises selecting [5] Critical and [4] Increase on a 5-point scale where [5] Critical and [1] Unimportant
1 2005 defined as “Partnering with your organization to identify and execute growth strategies” and 2008 defined as “Inputs into identifying and executing growth strategies”
2 2005 defined as “Driving cost reduction” and 2008 defined as “Driving cost reduction”
Source: IBM Institute for Business Value, The Global CFO Study 2005, 2008, 2010
6
© 2010 IBM Corporation
Introduction
Analysis of CFO responses and objective enterprise financial
measures identified enablers to deliver efficiency and insight
Finance Efficiency and Business Insight Enablers
Business Insight
Finance Efficiency
Enabler
Low
High
Corporate philosophy on
information standards
Do not see any value in
enterprise-wide standards
Enterprise-wide standards
mandated for all business units
and enforced
Common Finance data
definitions and data governance
Not adopted
Enterprise-wide > 75%
Standard Financial chart of
accounts
Not adopted
Enterprise-wide > 75%
Standard / common Finance
processes
Not adopted
Enterprise-wide > 75%
Analytical capability (operational
planning and forecasting)1
Not deployed
Satisfactory analytical capability
People / talent (effectiveness of
developing people in Finance)
Ineffective
Effective people / talent
Technology (deployment of a
common planning platform)
Not deployed
Deployed to a large extent
1
Also analyzed Scenario Planning, Predictive Analytics
Source: IBM Institute for Business Value, The Global CFO Study 2010
7
© 2010 IBM Corporation
Introduction
Four Finance profiles become apparent when participants are
segmented by efficiency and business insight
Finance Profiles
High
Finance
Efficiency
32%
23%
33%
12%
Low
Low
High
Business Insight
Source: IBM Institute for Business Value, The Global CFO Study 2010
8
© 2010 IBM Corporation
Introduction
Value Integrators excel in both efficiency and business insight,
contributing to financial outperformance
Efficiency + Business Insight Contributes to Outperformance
> 20x
more
14.0%
49%
30%
more
more
Value Integrators
All other enterprises
12.1%
11.3%
9.4%
9.3%
0.5%
EBITDA
Revenue
ROIC
5-year CAGR, 2004-2008
5-year CAGR, 2004-2008
5-year average, 2004-2008
Value Integrators also have an almost
20% better operating efficiency ratio than
all other companies examined.
Revenue Growth: N = 580; EBITDA: N = 531; ROIC: N = 501;
Source: IBM Institute for Business Value, The Global CFO Study 2010
9
© 2010 IBM Corporation
Efficiency through standards
Enterprises that have adopted standards and increased Finance
efficiency are performing better
Effectiveness Benefits of Finance Efficiency
Effectiveness Against
Core Finance Activities
Strengthening compliance
programs and internal
controls
Finance Efficiency Helps the
Enterprise React to External Forces
65%
62%
Driving Finance function
cost reduction
25%
better
52%
56%
11%
Enterprises with high
Finance efficiency
74%
better
20%
better
Executing continuous
Finance process
improvement
Developing your people in
the Finance organization
61%
27%
better
48%
56%
46%
Enterprises with high Finance efficiency
62%
22%
better
All other enterprises
N = 1,867 to 1,880
Note: Defined as those enterprises selecting [5] Very Effective or [4] on a 5-point scale
where [5] Very Effective and [1] Ineffective
Source: IBM Institute for Business Value, The Global CFO Study 2010
10
All other enteprises
N = 1,883
Note: Defined as those enterprises selecting [5] Very Well or [4] on a 5-point scale
where [5] Very Well and [1] Very Poorly
© 2010 IBM Corporation
Efficiency through standards
Enterprises that establish process ownership are far more likely to
achieve the standards that enable Finance efficiency
Accelerator: Process Ownership
Adoption of Process Ownership
Impact on Standards
Percent adopted enterprise-wide > 75%
52%
Common processes
145%
Common data definitions
80%
26%
208%
better
73%
30%
68%
39%
143%
better
33%
Globally mandated standards
73%
better
81%
more
All other
enterprises
90%
Standard chart of accounts
Enterprises
with high
Finance
efficiency
74%
better
Enterprises that have implemented processs ownership enterprise-wide
All other organizations
N = 1,869
Note: Defined as those enterprises selecting >50% adoption rate
Source: IBM Institute for Business Value, The Global CFO Study 2010
11
N = 1,863 to 1,889
© 2010 IBM Corporation
Efficiency through standards
A common technology platform drives a greater adoption of
standards
Accelerator: Common Ledger and Accounting Transaction Applications
Implementation of a Common Ledger and
Accounting Transaction Applications
Percent adopted Enterprise-wide > 75%
75%
Standard chart of accounts
Enterprises
with high
Finance
efficiency
29%
91%
Common processes
47%
more
All other
enterprises
Impact on Standards
Common data definitions
better
52%
13%
300%
better
50%
22%
53%
32%
127%
better
62%
Globally mandated standards
159%
66%
better
Enterprises that have implemented a common ledger and accounting transaction
applications
All other organizations
N = 1,875
Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point
scale where [5] To a very large extent and [1] Not at all
Source: IBM Institute for Business Value, The Global CFO Study 2010
12
N = 1,852 to 1,880
Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point
scale where [5] To a very large extent and [1] Not at all
© 2010 IBM Corporation
Efficiency through standards
Alternative delivery models enforce the adoption of standards
Accelerator: Alternative Delivery Models for Transactional Activities
Enterprise-wide Shared Services /
Centers of Excellence or Outsourcing
Adoption
Impact on Standards
Percent adopted enterprise-wide > 75%
56%
49%
Common processes
69%
more
All other
enterprises
77%
Standard chart of accounts
Enterprises
with high
Finance
efficiency
Common data definitions
60%
33%
better
82%
better
52%
39%
57%
42%
33%
better
29%
Globally mandated standards
38%
36%
better
Enterprises that have adopted shared services / COEs or outsourcing enterprisewide for transactional activities
All other organizations
N = 1,892
Note: Defined as those enterprises selecting Enterprise-wide where choices included
Enterprise-wide, Line of business consolidation, Country / regional-based, Not adopted
Source: IBM Institute for Business Value, The Global CFO Study 2010
13
N = 1,863 to 1,887
© 2010 IBM Corporation
Business insight
Objective financial data validates that decision making supported by
business insight contributes to enterprise outperformance
Business Insight Contributes to Financial Outperformance
Revenue Growth
EBITDA
Return on Invested Capital
5-year CAGR, 2004-2008
5-year CAGR, 2004-2008
5-year average, 2004-2008
12.5%
33%
> 12x
more
more
32%
more
11.9%
9.4%
9.0%
7.3%
0.6%
Finance organizations with strong business insight
All other enterprises
Revenue Growth: N = 580; EBITDA: N = 435; ROIC: N = 606
Source: IBM Institute for Business Value, The Global CFO Study 2010
14
© 2010 IBM Corporation
Business insight
Finance organizations with strong business insight are performing
better
Effectiveness Benefits of Business Insight
Effectiveness Against
Enterprise Focused Activities
79%
Measuring / monitoring
business performance
54%
53%
71%
39%
better
better
40%
63%
45%
All other enterprises
51%
better
63%
49%
30%
Finance organizations with strong business insight
better
All other enterprises
N = 1,458 to 1,469
Note: Defined as those enterprises selecting [5] Very Effective or [4] on a 5-point scale
where [5] Very Effective and [1] Ineffective
Source: IBM Institute for Business Value, The Global CFO Study 2010
15
34%
39%
46%
Supporting / managing /
mitigating enterprise risk
Finance
organizations with
strong business
insight
better
64%
Providing inputs into
enterprise strategy
46%
better
71%
Driving enterprise cost
reduction
Driving integration of
information across the
enterprise
Business Insight Helps the
Enterprise Anticipate External Forces
N = 1,471
Note: Defined as those enterprises selecting [5] Very Well or [4] on a 5-point scale
where [5] Very Well and [1] Very Poorly
© 2010 IBM Corporation
Business insight
Finance organizations with strong business insight have automated
production, are more efficient, and facilitate speed of insight
Accelerator: Timely Metrics
High Automation
Financial
Metrics
Finance
organizations
with strong
business
insight
Enterprises that automate
the production of financial
metrics
73%
All other
enterprises
29%
more
better
All other enterprises
Enterprises that automate
the production of
operational metrics
61%
Metrics
38%
53%
42%
39%
more
better
43%
Financial: N = 1,463; Operational: N = 1,435
Note: Defined as those enterprises selecting [5] Largely automated or [4] on a 5-point scale
where [5] Largely automated and [1] Largely manual
Source: IBM Institute for Business Value, The Global CFO Study 2010
16
49%
28%
57%
Finance
organizations
with strong
business
Operational insight
All other
enterprises
Impact on Analytics Satisfaction
All other enterprises
38%
Financial: N = 1,454; Operational: N = 1,428
© 2010 IBM Corporation
Business insight
Finance organizations with strong business insight establish
operational data standards, providing common “truth”-based insight
Accelerator: Establishment of Non-Financial Data Standards
High Adoption
Finance
organizations with
strong business
insight
All other enterprises
Impact on Analytics Satisfaction
Enterprises that
establish nonfinancial data
standards
53%
51%
42%
more
better
35%
N = 1,449
Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point
scale where [5] To a very large extent and [1] Not at all
Source: IBM Institute for Business Value, The Global CFO Study 2010
17
54%
All other enterprises
38%
N = 1,442
© 2010 IBM Corporation
Efficiency + Business insight
Those that excel in both efficiency and business insight contribute to
even better financial outperformance
Efficiency + Business Insight Contributes to Outperformance
Revenue Growth
EBITDA
Return on Invested Capital
5-year CAGR, 2004-2008
5-year CAGR, 2004-2008
5-year average, 2004-2008
Finance Efficiency
14.0%
9.8%
9.0%
11.3%
3.9%
9.3%
-2.1%
12.1%
10.2%
-0.1%
Business Insight
7.8%
11.6%
Business Insight
Value Integrators also have an almost
20% better operating efficiency ratio than
all other companies examined.
Revenue Growth: N = 580; EBITDA: N = 531; ROIC: N = 501
Source: IBM Institute for Business Value, The Global CFO Study 2010
18
© 2010 IBM Corporation
Efficiency + Business insight
Value Integrators drive broader improvements in data and analytics,
process, technology and people
What do Value Integrators do differently?
Data and
Analytics
• Improve information delivery
• Drive data integrity
• Use different approaches to help the
enterprise make decisions
Process
• Focus on next tier process improvements
Technology
• Rationalize and standardize analytical
technologies
People
• Drive risk management through CFO direct
reports of Controls and Risk Management
Source: IBM Institute for Business Value, The Global CFO Study 2010
19
© 2010 IBM Corporation
Efficiency + Business insight
Value Integrators drive broader improvements in data and analytics,
process, technology and people
What do Value Integrators do differently?
% more
32%
Streamlined information delivery
Electronic data capture at the source
35%
Systematic data cleansing and auditing
31%
Business Risks in Performance Reporting
22%
Employed Functional Best Practices
31%
Utilized automated workflow tools
25%
Measurement & monitoring of processes
41%
Common reporting platform
31%
Common planning platform
22%
0%
20%
40%
60%
80%
100%
Percent Adopted
Disciplined Operators
Constrained Advisors
N = 1,454 to 1,469
Note: Defined as those enterprises selecting [5] To a very large extent or [4] on a 5-point scale where [5] To a very large extent and [1] Not at all
Source: IBM Institute for Business Value, The Global CFO Study 2008, 2010
20
Value Integrators
© 2010 IBM Corporation
Country Scorecard – Integrated Risk management
21
© 2010 IBM Corporation
Smart risk management is about collecting better information, using it
more quickly and more effectively, and minimizing the need for human
interaction in routine events.
Country Financial Risk Scorecard
Smarter Near Real-time Integrated Risk Management
INSTRUMENTED
INTERCONNECTED
INTELLIGENT
The smart scorecard is
instrumented, enabling IBM to
measure and control risk data at
the country level and allows CFOs
to sense and respond quickly
to financial risks.
The smart scorecard is built on
interconnected data that enables
business insight and collaboration
and provides a single source for
information.
The smart scorecard enables
the rapid, intelligent analysis of
a vast mix of structured and
unstructured data to improve
insight and enable informed
judgment.
22
22
© 2010 IBM Corporation
Optimizing finance’s contribution to a globally integrated enterprise
Tomorrow
Today
Vast amounts of data
I&
E
B/S
Sources
Finance
GMV
FIW-LR
SBU
Other
data
I&
E
B/S
External data
16 data
sources
Various flows
KPIs Manual
aggregation
and
analysis
External data
16 data
sources
Automated
information
integration and
financial risk
monitoring
DB2
SPSS
Matlab
Income & Expense ($ in M)
Revenue
466
(5)%
252
7%
70
(12)%
79
3%
13 %
87
92
Growth/(Decrease)
111
(8)%
57
136
12 %
70
180
51 %
99
519
11 %
265
132
43 %
61
Cash
(30)%
22
(13)%
24
7%
30
53 %
32
5%
108
55 %
30
USD
LC Denominated
25 %
2%
41 %
94 %
37 %
35 %
15
17
46
78
14
Total
Intercompany Payables
(101)%
8.4%
(34)%
7.8%
(25)%
6.4%
71 %
6.0%
(15)%
7.1%
9.6%
11.6%
10.8%
8.5%
7.2%
7.0%
8.4%
2.0 pts
3.7 %
0
(1.1)pts (2.3)pts (1.3)pts (0.2)pts (3.2)pts
(0.7)% (2.7)% (2.2)% (1.4)% (1.8)%
0
0
0
0
0
Currency Spot Rate
Shipped but Uninstalled
7.1
8.3
(4)%
(17)%
10.0
8.5
7.8
7.5
(21)%
15 %
8%
4%
8.4
(2)%
Controllable FCF
Net Exposed Position
5,882 % Percent Change
5.7% Current Ratio
7.0%
Return on Equity (ROE) Annualized
(1.4)pts GMU ROE Annualized
(3.0)% Major Market ROE Annualized
0
Total Dividends
7.5
Translation Losses
FY2006
FY2007
FY2008
1Q2009
2Q2009
3Q2009
0.0
0.0
0.0
Macroeconomic Indicators
Country IBM GRMG
2007
2008
Sovereign Risk
BBB
BBB
0.0
0.0
1.4
1.7
0.0
0.0
0.0
0.0
1Q2009 2Q2009 3Q2009 4Q2009
BB
BB
BB
BB
1.7
0.0
2009
3
BB
0.8
Days Sales Outstanding
BBB
Country
Currency Risk
BBB
BB
BB
BB
BB
BBB
BBB
BBB
Growth Market Unit
BBB
BBB
BBB
BBB
BBB
BBB
BBB
BBB
Major Market
Macroeconomic Risk
9
3
5
36
4
36
7
15
7
90
26
53
0.0
68.4
0.0
52.6
0.0
41.2
0.0
80.4
0.0
80.4
0.0
60.0
69
68.4
53
41
80
80
50
54
51
19
33
48
48
37
(5)%
(62)%
69 %
46 %
0%
(22)%
9%
7%
2.1 x
1.8 x
1.9 x
1.5 x
1.4 x
1.6 x
1.6 x
1.5 x
72 %
32 %
14 %
0
83 %
44 %
20 %
0
(1)%
26 %
14 %
0
28 %
33 %
16 %
0
40 %
32 %
16 %
0
66 %
39 %
18 %
0
66 %
39 %
18 %
0
34 %
19 %
14 %
0
(7)
61.8
1
2
8
0
53.3
45.0
59.4
67.6
53.9
58.8
58.8
57.7
Hardware
2
Software
(14)
Services
(1)
Other
6
Total
% Business Partner Revenue
30
45
45
60
60
60
60
60
Gross Profit Margin
15%
27%
26%
17%
45%
44%
12%
22%
55%
Hardware
Software
Services
14%
13%
10%
Other
100%
Total
32
36
36
36
36
36
36
36
Country
36.3%
99.3%
13.2%
69.8%
46.6%
21
25
25
29
29
29
29
29
GMU
34.4%
96.4%
25.6%
56.0%
44.0%
45
Major Market
35.2%
96.6%
27.0%
63.8%
47.4%
Computer
Services
Comm
Dist
43
45
46.8
250.9
364.3
215.8
142.8
142.4
216.3
135.5
(16)%
436 %
75 %
13 %
(32)%
(64)%
(14)%
(63)%
(61.2)
41
(68.5)
43
(14.4)
(5.1)
(4.4)
(6.5)
(30.4)
(6.5)
9.2%
11.0%
11.3%
11.9%
45
12.6%
45
11.5%
45
11.0%
14.2%
Fiscal Debt/GDP
14%
26%
28%
28%
28%
25%
25%
32%
Deficit/GDP
0.5 %
0.8 %
(0.3)%
(0.3)%
(0.3)%
(0.3)%
(1.1)%
(2.4)%
5.1
5.6
4.7
4.7
4.7
4.7
4.7
4.7
Corruption Perception Index
KRIs = Key Risk Indicators; KPIs = Key Performance Indicators
Industry Concentration
IBM Risk Score
5 - Overall Score
31%
100%
31%
100%
Foreign Trade/Payments Risk
Foreign Reserves/GDP
60
2.1 x
94 %
21 %
16 %
0
Financial Risk
CDS Pricing change
1Q2010
6
111
0.0
69.2
119
0.0
1Q 2010 Businss Model First Quarter 2010
3
Revenue Mix
Banking Sector Risk
Balance of Payments
FY2009
17
100
0.0
119.2
78
46
Other Metrics
0.0
Revenue Reversals
Risk Briefing Rating
4Q2009
8
49
0.0
78.1
24 %
Other Metrics
CDS Pricing bps
23
92
(11)%
40
0.6 pts
5.5 %
0
Strengthen/(Devaluation)
5%
11.5%
1Q2009 2Q2009 3Q2009 4Q2009 FY2009 1Q 2010 Balance Sheet ($ in M)
(0.23996)
Interest Rates
Real GDP Growth/(Decline)
Exchange Gain/Losses
5%
7.1%
Cognos
Growth/(Decrease)
Inflation/Deflation
Integrated business insights
needed!
FY2008
491
10 %
286
Pre Tax Income
Gross Profit
Growth/(Decrease)
KRIs – Business
insights into risk
exposures
FY2007
SG&A Expense
Growth/(Decrease)
Growth/(Decrease)
Risk–based
predictive
analytics:
•By country
•Trends
Other
data
GMV
FIW-LR
SBU
Financial
Industrial
Services
15%
Country GP Normalized
-41.3%
(2.7)pts
41.1%
(6.3)pts
Public
General
Bus.
0%
20%
0%
29%
5%
18%
28%
100%
FY2007
FY2008
1Q2009
2Q2009
3Q2009
4Q2009
FY2009
1Q 2010
56%
43%
42%
45%
32%
26%
54%
68%
Risk Multiples
GMU
Major
Country Risk/Unit Risk
Relative Profit Con
1.2 x
0.6 x
B/(W)
(0.6)x
(1.7)x
Profit Con Normalized
GMU
Major
Country Margin
5%
Compare Margin
9%
2.0 x
0.3 x
5%
16%
Delta
(4.0)Pts
(11.3)Pts
Short-Term Signings
1Q2010
% Change
from 1Q2009
15.35
-22.1%
Long-Term Signings
1Q2010
% Change
from 1Q2009
22.748
28.1%
Country
Financial
Risk Scorecard
Finance/GMs
© 2010 IBM Corporation
IBM Country Financial Risk Scorecard
Smarter use of integrated information to enhance IBM’s ability to identify and manage
financial risks and seize opportunities across the enterprise.
IBM Country Risk Score
Historical Trends & Forward Prediction
Economic
Indicators
Income &Expense ($ in M)
FY2006 FY2007 FY2008 1Q2009
2Q2009
3Q2009 4Q2009 FY2009 1Q2010 2Q2010 Balance Sheet ($ in M)
Revenue
9,505
(11)%
5,814
9,515
0%
5,575
10,333
9%
5,718
2,624
(0)%
1,487
2,384
(4)%
1,357
2,499
2%
1,374
2,676
(3)%
1,451
10,183
(1)%
5,670
2,627
0%
1,450
2,487 Cash
4% Controllable FCF
1,400 Net Exposed Position
204
1,322
167
1,544
220
2,072
366
188
242
537
3,691
(3)%
3,940
7%
4,615
17 %
1,136
(4)%
1,027
(4)%
1,125
4%
1,225
(5)%
4,513
(2)%
1,177
4%
1,087 USD
6% LCDenominated
0.0
(867.5)
0.0
(777.7)
4.0
(402.0)
5.0
100.1
4.0
(566.3)
330
2Q2009
2%
2,384
474
(4)%
2%
1,357
-0.1%
328
3Q2009
(4)%
Growth/(Decrease)
Cost
Gross Profit
Growth/(Decrease)
SG&AExpense
Income & ExpenseGrowth/(Decrease)
($ in M)
FY2006
Revenue
Pre Tax Income 9,505
Growth/(Decrease)
Growth/(Decrease) (11)%
SG&A Expense
Inflation/Deflation 5,814
3,691
Interest Rates
(3)%
Global Market Value
1,136
Growth/(Decrease)
Growth/(Decrease)
Cost
Gross Profit
1,136 1,186 1,285
FY2007 FY20084 % 1Q2009
8%
9,5151,26910,333
1,434 2,624
1,696
0 % (1)% 9 %13% (0)%
18 %
5,5750.3% 5,7180.1% 1,487
1.4%
3,940
4,615
1,136
1,027
1.7%
1.7% 1.5% 1.3%
7%
17 %
(4)%
(4)%
91,773 330
105,576 34,725
1,18691,6651,285
328
15 %
5%
4%
8 %12% 2 %
(4)%
2.0 % 2.4 % (1.2)% (8.9)%
Real GDPGrowth/(Decline)
Pre Tax Income
1,269
1,434 (0) 1,696 0 474(0)
391
0
Exchange Gain/Losses
Growth/(Decrease)
(1)%
13 %
18 %
2%
11 %
I and Eexchange rate
116
118
103
94
0.3%
0.1%
1.4%
-0.1%
-1.0%
Inflation/Deflation
Strengthen/(Devaluation)
(1)% 12 %
9%
1.7%
1.7%
1.5%
1.3%
1.4%
Interest Rates
Other Metrics
91,665
91,773
105,576
34,725
22,367
Global Market Value
Shipped but Uninstalled
0.0
0.0
0.0
0.0
Growth/(Decrease)
15 %
5%
2%
12%
Revenue Reversals2.0 %
0.0
0.0
2.4 %0.0 (1.2)%0.0 (8.9)%
(5.7)%
Real GDP Growth/(Decline)
(0)
0 2006 (0) 2007 02008 1Q2009
0
Exchange Gain/Losses
Macroeconomic Indicators
Growth/(Decrease)
FY2006
335
367
1,360
343
339 Total
-867
4Q2009
FY2009 6%
1Q 2010 4 %2Q20103%Balance
Sheet ($Payables
in M)
FY2006
Intercompany
5%
22%
763
2,499
2,676 493
10,183 1,798
2,627 618 2,487 381CashIntercompany Aging
204
391
440
TBD
Controllable
FCF
2%
(1)% 6%0 % 30% 4 % (3)%
1,322
Percent Change
11%
13(3)%
%
1%
1,374 -2.2%
1,451 -2.0%
5,670 -1.3%
1,450 -1.2%1,400-1.1%
Net Exposed
Position
-1.0%
Current Ratio
0.8 x
1,125
1,225
4,513
1,177
1,087 USDReturn on Equity (ROE)
0.0
1.4%
1.3%
1.3% 1.4%
1.3%
1.2%
49 %
Annualized
4%
(5)%
(2)%
4%
6 % LC Denominated
(867.5)
22,367
21 %
335 27,224
367 25,045
1,360 109,360
343 33,10233923,096
TotalGMUROEAnnualized
-867
2 %5 %
5%
16 %
Major Market
ROEAnnualized 763
Payables
22 % 2 %
6 % 4%4 % (5)% 3 % 3%Intercompany
(5.7)%
(5.2)% (1.1)% (5.2)% 4.6 % 4.6 %
Intercompany Aging
493
TBD
0440
(0)
01,798 (0) 618 0 381 (0) Dividends Payable
0
13 %
1%
6%
30 %
(3)% Percent Change
97
94
90
94
91
92 B/STranslation Losses
(32)
-2.2%
-2.0%
-1.3%
-1.2%
-1.1% Current Ratio
0.8 x
(4)%
4%
4%
9%
3%
5%Return on Equity (ROE)
1.3%
1.3%
1.4%
1.3%
1.2%
49 %
Annualized
Other Metrics
27,224 25,045 109,360 33,102 23,096 GMU ROE Annualized
2144.8
%
0.0
0.0
0.0
0.0
0.0
0.0 Days Sales Outstanding
5%
2%
4%
(5)%
3 % Major Market ROE Annualized 16 %
0.0
(5.2)% 0.0
(1.1)% 0.0
(5.2)% 0.04.6 % 0.0 4.6 % 0.0
(0) 3Q2009
0 4Q2009
(0) 2009 0 1Q2010(0)2Q2010
Dividends
Payable
2Q2009
Businss
Model First Quarter 20100
1 91 1 92 1B/S Translation
Revenue MixLosses
94
90
94
(32)
Country IBMGRMG116
I and E exchange rate
118
94
97
Strengthen/(Devaluation)
Sovereign Risk
(1)% A 12 % A
9 %A
A
(4)%
BBB
4%
BBB
4%
Other Metrics
Currency Risk
Shipped but Uninstalled
Banking Sector Risk0.0
A
A
0.0 AA 0.0 A
A
0.0 A
A
0.0
A
A
A0.0
A
A0.0
A
A0.0
A
0.0
80
2Q2009
18
800.0
3Q2009
18
0.0
75
4Q2009
18
750.0
182009
1
21
26BBB
75 0.0 75 0.0 75 Gross Profit Margin
1Q 2010 182Q2010 18Businss
Model First Quarter 2010
18
Country
1
1
Revenue Mix
21
21
21 GMU
26BBB 26 BBB 26Country
Major Market
A
A
Growth Market Unit
70
88
111
A
A
Major Market
103
Revenue Reversals Macroeconomic Risk0.0
0.0 50 0.0 45 0.0 45
Macroeconomic Indicators
2006 Risk 2007 14 2008 18 1Q2009
Foreign Trade/Payments
18
Country IBM GRMG
Financial Risk
25
17
21
A
A 26 A 25 A 25
Sovereign Risk
Risk Briefing Rating
A
A
A
A
Currency Risk
6
12
31
CDSPricing bps
AA
A
A
A
Banking Sector Risk
21
BBB
28
A
88
A
21
29BBB
A
61
A
21
BBB
26
A
52
A
78
A
A
Metrics
AOtherGrowth
Market Unit
SalesMarket
Outstanding
A 0.0 ADaysMajor
45 56.97 4570.58 8052.64
18
18
18
2.0%
2.1% 1.7%
17
21
21
80
8.50
18
1.2%
21
11.2375
18
1.0%
21
75
14.77
18
0.8%
21
ProfitConcentration
Margin
12.6775 47.17 75 18.33 75 13.20Gross
Industry
18
18
18 Country
0.7% 0.9%
0.5%
0.5%
21
21
21 GMU
Risk Briefing RatingFiscal Debt/GDP 26
25 163% 25162% 28168%
183%
29
179%26
183%
26
191%
26
181%26 190% 26 187%
Risk Score
MajorIBM
Market
0.9 %
88
7.3
0.2 %
61
7.7
0.2 %
52
7.7
0.2 %
78
7.7
0.2 %
70
7.7
0.9 % 0.2 % 0.2 %
88
111
7.7
7.7
7.7
8.50
11.23
Surplus(Deficit)/GDP
6
Corruption Perception Index
Current Account
Foreign Reserves/GDP
56.97
2.0%
12
0.6 %
31
0.5 %
7.6
70.58
2.1%
7.5
52.64
1.7%
1.2%
1.0%
14.77
0.8%
12.67
0.7%
47.17
0.9%
18.33
0.5%
13.20
2 - Shareholder Value
Industry Concentration
0.5%
Fiscal Debt/GDP
163%
162%
168%
183%
179%
183%
191%
181%
190%
187% IBM Risk Score
Surplus(Deficit)/GDP
0.6 %
0.5 %
0.9 %
0.2 %
0.2 %
0.2 %
0.2 %
0.9 %
0.2 %
0.2 %
7.6
7.5
7.3
7.7
7.7
7.7
7.7
7.7
7.7
7.7
Corruption Perception Index
2 - Shareholder Value
FY2007
FY2008
1Q2009
-778
FY2007
863
167
TBD
1,544
13
-398
FY2008
701
220
TBD
2,072
-19
105.1
1Q2009
573
0.8 x
0.9 x
4.0
155
%
(402.0)
44%
-398
20%
701
1.0 x
5.0
463%
100.1
26 %
105.1
14 %573
0.0
72 %
(777.7)
32
%
-778
14863
%
0TBD
0TBD
13
-19
168
369
0.8 x
0.9 x
(18.08)% 31.36 %
72 %
155 %
#DIV/0!
#DIV/0!
32 %
44 %
41.5
41.9
14 %
20 %
-10%
-48%
0
0
Hardware
168
Software
369
TBD366
-18188
2Q2009
3Q2009
4Q2009
44.8
#DIV/0!
28%
41.5
14%
#DIV/0!
19%
41.9
22%
28%
369
395
249
568
(61.0)
(174.9)
(89.2)
(517.5)
Income &
Expense
-562
-408
-506
-506
-236
-607
5552Q2009 6103Q2009626 4Q2009626 FY2009
463 1Q2010
590
215 TBD
215TBD
369TBD
TBD 242 TBD 316 TBD
(3)%537 10 % 515 3 % 244 0% 1,483
(26)% 395
27 %
0.8 x
0.9 x
0.9 x
0.9x
0.9 x
4.0
4.0
11.0
11.0
280%
164 % (516.5)
99%
(566.3)213%(411.7)164 % (516.5)
33%-562 32 % -408 39% -50639% -506
19%
16% 555 16 % 610 18% 62618% 62614%
Services
(15)
41%25%
54%38.3
Other 13 Total 57
40%
96.7%
5%
20%
Comm
1%
5%
FY2007
FY2008
40%
2Q2010
249
568
0.8x
(61.0)
71 %
(174.9)
26 %
-236
15 %
463
TBD
TBD
0 TBD
0 TBD 0 TBD 0
0
0
-18
(3)%
10 %
3%
0%
(15)
13
57
(59)
(3)
(5)
1.0 x
0.8 x
0.9 x
0.9 x
0.9 x
66.62 % (33.82)% 30.56 % (32.20)% (2.39)% 72.07 %
463 % -20%280 % 0% 213 %174% 164 %174% 164-657%
%
25%
38.326 % 36.933 % 39.1 32 % 36.3 39 %36.3 39 %
39.1
14 %
16 %
16 %
18 %
18 %
-125%
-666%
-27%
25%
28%
-66%
0
0
0
0
0
(89.2)
(517.5)
-607
590
TBD
TBD
0
(26)%
27 %
102
0.9 x
0.8 x
2.62 %
9946%
%
71 %
1939.5
%
26 %
14 %
15 %
196%
0
0
%(59)
Business Partner
(3) Revenue (5)
12%-20% 100% 0%
10% 36.9 100% 39.1
14%
(32.20)%
(2.39)%
174%33%
36.316%
174%
-657%
36.3
39.1
-27% GPNormalized
25%
Country
28%
Risk Multiples
102
72.07 % Country
2.62 Risk/Unit
%
Risk
46% GPMargin
Relative
39.5
B/(W)
196% Ratio
GPNormalized
-66%
20%
GMU
Major
0.7 x
1.1 x
1.1x
1.0x
0.4 x
GMU
(0.1)x
Major
Country Margin
50.3%
Risk Multiples
Compare Margin
46.94%
50.0%
GMU
48.6%
Major
0.7 x
DeltaCountry Risk/Unit
3.4 pts Risk 1.5pts
Relative GP Margin %Change
1.1 x
Short-TermSignings 2Q2010
from2Q2009
B/(W)
0.4 x
GP Normalized
GMU
792.0Ratio -13.7%
(0.1)x
Major
Country Margin %Change
50.3%
Long-TermSignings 2Q2010
Compare Margin from2Q2009
46.94%
48.6%
1.1 x
1.0 x
Macro
Indicators
54%
10%
100%
16%
Services Financial
OtherIndustrialTotalPublic
CountryGeneral
GP Normalized
Dist
Services
Bus.
32.9%
62.9%
43.7%
-26.9%
9%
pts
49%57.5% 19% 46.9% 5% 50.3%11% 3.4 100%
FY2007
3Q2009 48.6%
4Q2009 50.0%
FY2009 1.5
1Qpts
2010
39.3% FY2008
96.5% 1Q200928.3% 2Q200964.2%
Computer
Services
2Q2010
215
1,483
11.0
(516.5)
90.1%
32.9%
62.9%
43.7%
-Software
Services
Other
Total
% Business Partner Revenue
96.7%
26.9%
57.5%
46.9%
50.3%
3.4 pts
12%
69% 64.2%10% 48.6%100%50.0%
96.5%
28.3%
1.5 pts 14%
19%
41%
12%
100%
33%
14%
22%
Computer
Hardware Comm
Software
Services
43.0%
90.1%
37.4%
1%
1Q2010
215
244
11.0
(516.5)
-10% Software
-48% Services-125%Other -666%
Hardware
Total
43.0%
Hardware
37.4%
9%
39.3%
FY2009
316
515
4.0
(411.7)
9%
100% 30.56 %
(18.08)% 12%
31.36 % 69%66.62 %10%(33.82)%
A
A 0.0
14
Foreign Trade/Payments Risk
Foreign Reserves/GDP
25
CDS Pricing bps
50
BBB
9 % BBB3 % BBB 5 % BBB Country
Financial Risk
Macroeconomic RiskCurrent Account
24
Shareholder
Value
60%
Dist
40%
40%
60%
Financial
Industrial
Services
60%
Public
40%
2Q2010
Delta
390.6
40%
Short-Term Signings
General
Bus.
Long-Term Signings
9%
49%
19%
5%
11%
100%
1Q2009
2Q2009
3Q2009
4Q2009
FY2009
1Q 2010
2Q 2010
40%
40%
60%
60%
40%
40%
60%
50.0%
3.4 pts
-24.1%
1.5 pts
2Q2010
% Change
from 2Q2009
792.0
-13.7%
2Q2010
% Change
from 2Q2009
390.6
-24.1%
Liquidity
Factors
Risk Reward
Income & Expense ($ in M)
FY2006 FY2007 FY2008 1Q2009
2Q2009
3Q2009 4Q2009 FY2009 1Q 2010 2Q2010 Balance Sheet ($ in M)
Revenue
9,505
(11)%
5,814
9,515
0%
5,575
10,333
9%
5,718
2,624
(0)%
1,487
2,384
(4)%
1,357
2,499
2%
1,374
2,676
(3)%
1,451
10,183
(1)%
5,670
2,627
0%
1,450
2,487 Cash
4 % Controllable FCF
1,400 Net Exposed Position
204
1,322
167
1,544
220
2,072
366
188
242
537
316
515
215
244
215
1,483
369
395
249
568
3,691
(3)%
3,940
7%
4,615
17 %
1,136
(4)%
1,027
(4)%
1,125
4%
1,225
(5)%
4,513
(2)%
1,177
4%
1,087 USD
6 % LC Denominated
0.0
(867.5)
0.0
(777.7)
4.0
(402.0)
5.0
100.1
4.0
(566.3)
4.0
(411.7)
11.0
(516.5)
11.0
(516.5)
(61.0)
(174.9)
(89.2)
(517.5)
Growth/(Decrease)
Balance
Sheet
Cost
Gross Profit
Growth/(Decrease)
FY2006
FY2007
FY2008
1Q2009
2Q2009
3Q2009
4Q2009
FY2009
1Q2010
2Q2010
SG&A Expense
Income & Expense ($ in M)
1,136
1,186 1,285
330
328
335
367
1,360
343
339 Total
-867
-778
-398
105.1
-562
-408
-506
-506
-236
-607
FY2006 FY2007 FY2008 1Q2009
2Q2009
3Q2009 4Q2009 FY2009 1Q 2010 2Q2010 Balance Sheet ($ in M)
FY2006
FY2007
FY2008
1Q2009
2Q2009 3Q2009 4Q2009 FY2009 1Q2010 2Q2010
Growth/(Decrease)
4%
8%
2%
(4)%
5%
22 %
6%
4%
3 % Intercompany Payables
763
863
701
573
555
610
626
626
463
590
Revenue
9,505
9,515 10,333 2,624
2,384
2,499
2,676 10,183 2,627
2,487 Cash
204
167
220
366
242
316
215
215
369
249
Pre Tax Income
1,269
1,434 1,696
474
391
440
493
1,798
618
381 Intercompany Aging
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
Growth/(Decrease)
(11)%
0%
9%
(0)%
(4)%
2%
(3)%
(1)%
0%
4 % Controllable FCF
1,322
1,544
2,072
188
537
515
244
1,483
395
568
Growth/(Decrease)
Percent Change
13
-19
-18
(3)%
10 %
3%
0%
(26)%
27 %
5,814 (1)% 5,57513 %5,71818 %1,487 2 % 1,35711 % 1,37413 % 1,451 1 % 5,670 6 % 1,45030 % 1,400 (3)%Net Exposed Position
Cost
0.3%
0.1%
1.4% -0.1%
-1.0%
-2.2% -2.0% -1.3% -1.2% -1.1% Current Ratio
Inflation/Deflation
0.8 x
0.8 x
0.9 x
1.0 x
0.8 x
0.9 x
0.9 x
0.9 x
0.9 x
0.8 x
Gross Profit
3,691
3,940 4,615 1,136
1,027
1,125
1,225
4,513
1,177
1,087 USD
0.0
0.0
4.0
5.0
4.0
4.0
11.0
11.0
(61.0)
(89.2)
Return on Equity (ROE)
1.7%
1.7%
1.5%
1.3%
1.4%
1.3%
1.3%
1.4%
1.3%
1.2%
Interest Rates
Growth/(Decrease)
(3)%
7%
17 %
(4)%
(4)%
4%
(5)%
(2)%
4%
6 % LC Denominated
(867.5)49 % (777.7)72 % (402.0)155 % 100.1463 % (566.3)280 % (411.7)213 % (516.5)164 % (516.5)164 % (174.9)99 % (517.5)71 %
Annualized
SG&AGlobal
Expense
1,13691,6651,18691,7731,285
TotalGMU ROE Annualized
-867 21 % -778 32 % -398 44 % 105.126 % -562 33 % -408 32 % -506 39 % -506 39 % -236 19 % -607 26 %
105,57633034,725 32822,367 33527,224 36725,0451,360
109,360 34333,102 33923,096
Market Value
Growth/(Decrease)
Payables
Growth/(Decrease)
4 % 12% 8 % 15 % 2 % 5 % (4)% 2 % 5 % 5 % 22 % 2 % 6 % 4 % 4 % (5)% 3 % 3 %Intercompany
Major Market
ROE Annualized763 16 % 863 14 % 701 20 % 573 14 % 555 16 % 610 16 % 626 18 % 626 18 % 463 14 % 590 15 %
RealIncome
GDP Growth/(Decline) 1,2692.0 % 1,4342.4 %1,696(1.2)% 474 (8.9)% 391 (5.7)% 440 (5.2)% 493 (1.1)%1,798(5.2)% 618 4.6 % 381 4.6 %
Pre Tax
Intercompany Aging
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
(0)
0
(0)
0
0
(0)
0
(0)
0
(0) Dividends Payable
0
0
0
0
0
0
0
0
0
0
Exchange Gain/Losses
Growth/(Decrease)
(1)%
13 % 18 %
2%
11 %
13 %
1%
6%
30 %
(3)% Percent Change
13
-19
-18
(3)%
10 %
3%
0%
(26)%
27 %
I and E exchange rate
B/SRatio
Translation Losses 0.8 x (32) 0.8 x 168 0.9 x 369 1.0 x (15) 0.8 x 13 0.9 x 57 0.9 x (59) 0.9 x (3) 0.9 x (5) 0.8 x 102
0.3% 116 0.1% 118 1.4% 103 -0.1% 94 -1.0% 97 -2.2% 94 -2.0% 90 -1.3% 94 -1.2% 91 -1.1% 92Current
Inflation/Deflation
Return on Equity (ROE)
Strengthen/(Devaluation)
(18.08)% 31.36 %
66.62 % (33.82)% 30.56 % (32.20)% (2.39)% 72.07 %
2.62 %
1.7%
1.7% (1)% 1.5%12 % 1.3% 9 % 1.4% (4)% 1.3% 4 % 1.3% 4 % 1.4% 9 % 1.3% 3 % 1.2% 5 %
Interest Rates
49 %
72 %
155 %
463 %
280 %
213 %
164 %
164 %
99 %
71 %
Annualized
Other Metrics
Other Metrics
#DIV/0!
#DIV/0!
25%
-20%
0%
174%
174%
-657%
46%
91,665 91,773 105,576 34,725
22,367
27,224 25,045 109,360 33,102 23,096 GMU ROE Annualized
Global Market Value
21 %
32 %
44 %
26 %
33 %
32 %
39 %
39 %
19 %
26 %
Shipped but Uninstalled
0.0 12% 0.0 15 % 0.0 5 % 0.0 2 % 0.0
Sales
Growth/(Decrease)
5 % 0.0 2 % 0.0 4 % 0.0 (5)% 0.0 3 % 0.0MajorDays
Market
ROEOutstanding
Annualized 16 % 44.8 14 % 41.5 20 % 41.9 14 % 38.3 16 % 36.9 16 % 39.1 18 % 36.3 18 % 36.3 14 % 39.1 15 % 39.5
Real Revenue
GDP Growth/(Decline)
Reversals
Exchange
Gain/LossesIndicators
Macroeconomic
I andCountry
E exchange
IBM rate
GRMG
Strengthen/(Devaluation)
Sovereign Risk
Other Metrics
Currency Risk
Shipped but Uninstalled
Banking Sector Risk
Revenue Reversals
Macroeconomic Risk
Macroeconomic Indicators
Foreign Trade/Payments Risk
Country IBM GRMG
Financial Risk
Sovereign Risk
Risk Briefing Rating
Currency Risk
CDSSector
PricingRisk
bps
Banking
2.0 % 0.0 2.4 % 0.0 (1.2)%0.0 (8.9)%0.0 (5.7)%0.0 (5.2)%0.0 (1.1)%0.0 (5.2)%0.0 4.6 % 0.0 4.6 % 0.0
(0)
0
(0)
0
0
(0)
0
(0)
0
(0) Dividends Payable
0
2006
2007
2008 1Q2009
2Q2009
3Q2009 4Q2009 2009 1Q 2010 2Q2010 Businss Model First Quarter 2010
116
118
103
94
97
94
90
94 1 91 1 92 1 B/S Translation
Losses
(32)
Revenue Mix
A (1)% A 12 % A 9 % A
0.0
0.0
2006
A
A
AA
50
14
25
26
A
AA 6
0.0
0.0
2007
A
A
A
A
45
18
17
25
0.0
0.0
2008
A
A
A
A
45
18
21
25
0.0
0.0
1Q2009
A
A
A
A
80
18
21
28
(4)% BBB
0.0
0.0
2Q2009
BBB
A
A
A
80
18
21
29
4 % BBB 4 % BBB 9 % BBB 3 % BBB 5 % BBB Country
Other Metrics
A
A
A
A
A Growth Market Unit
0.0
0.0
0.0
0.0
0.0 Days Sales Outstanding
44.8
A
A
A
A
A Major Market
0.0
0.0
0.0
0.0
0.0
75
75
75
75
75 Gross Profit Margin
3Q2009 4Q2009 2009 1Q 2010 2Q2010 Businss Model First Quarter 2010
18
18
18
18
18 Country
1
1
1 Revenue Mix
21
21
21
21
21 GMU
BBB
BBB
BBB
BBB
BBB Country
26
26
26
26
26 Major Market
A
A
A
A
A Growth Market Unit
A 52 A 78 A 70 A 88 A 111Major Market
Business
Model
A 12
A 31
A 88
A 61
Macroeconomic
Risk
Current Account
Foreign Trade/Payments Risk
Foreign
Financial
RiskReserves/GDP
50 56.97 45 70.58 45 52.64 80 8.50
14
18
18
18
25 2.0% 17 2.1% 21 1.7% 21 1.2%
80 11.23
21 1.0%
75 14.77 75 12.67 75 47.17 75 18.33 75 13.20GrossIndustry
Profit Margin
Concentration
18
18
18
18
18 Country
21 0.8% 21 0.7% 21 0.9% 21 0.5% 21 0.5%GMU
Risk Briefing
Rating
Fiscal Debt/GDP
26 163% 25 162% 25 168% 28 183%
29 179%
26 183% 26 191% 26 181% 26 190% 26 187%
MajorIBM
Market
Risk Score
18
2 - Shareholder Value
0.6 %
0.5 % 0.9 % 0.2 %
0.2 %
0.2 % 0.2 % 0.9 % 0.2 % 0.2 %
Surplus(Deficit)/GDP
6
12
31
88
61
52
78
70
88
111
CDS Pricing bps
7.6
7.5
7.3
7.7
7.7
7.7
7.7
7.7
7.7
7.7
Corruption Perception Index
56.97
70.58 52.64
8.50
11.23
14.77
12.67
47.17
18.33
13.20 Industry Concentration
Current Account
Foreign Reserves/GDP
2.0%
2.1%
1.7%
1.2%
1.0%
0.8%
0.7%
0.9%
0.5%
0.5%
Fiscal Debt/GDP
163%
162%
168%
183%
179%
183%
191%
181%
190%
187% IBM Risk Score
Surplus(Deficit)/GDP
0.6 %
0.5 %
0.9 %
0.2 %
0.2 %
0.2 %
0.2 %
0.9 %
0.2 %
0.2 %
7.6
7.5
7.3
7.7
7.7
7.7
7.7
7.7
7.7
7.7
Corruption Perception Index
2 - Shareholder Value
-10%
0
-48%
0
0
-125%
0
-666%
-27%
0
25%
0
168Hardware 369Software (15)Services 13 Other 57 Total (59)
28%
0
-66%
0
43.0%
90.1%
32.9%
62.9%
43.7%
Hardware Software Services
Other
Total
37.4%
96.7%
26.9%
57.5%
46.9%
9%
12%
69%
10%
100%
39.3%
96.5%
28.3%
64.2%
48.6%
28%
19%
41%
12%
100%
14%
22%
54%
10%
100%
57.5%49% 46.9%19% 50.3% 5% 3.4 pts11%
64.2%
pts
2Q2009 48.6%
3Q2009 50.0%
4Q2009 1.5FY2009
60%
40%
40%
196%
60%
100%
1Q 2010
60%
2Q 2010
40%
Comm
Dist
Public
General
Bus.
1%
5%
9%
49%
19%
5%
11%
100%
FY2007
FY2008
1Q2009
2Q2009
3Q2009
4Q2009
FY2009
1Q 2010
2Q 2010
40%
40%
60%
60%
40%
40%
20%
60%
GMU
Major
Country Risk/Unit Risk
Relative GP Margin
0.7 x
1.1 x
1.1 x
1.0 x
B/(W)
GP Normalized Ratio
0.4 x
GMU
(0.1)x
Major
Risk Country
MultiplesMargin GMU50.3% Major50.0%
Compare Margin
46.94%
48.6%
Country Risk/Unit Risk 0.7 x
1.1 x
Delta
3.4 pts
1.5 pts
Relative GP Margin
1.1 x
1.0 x
% Change
Short-Term Signings 2Q2010
from 2Q2009
B/(W)
0.4 x
(0.1)x
GP Normalized Ratio GMU
792.0 Major-13.7%
Country Margin
50.3%
50.0%
% Change
Long-Term
Signings46.94%
2Q2010 48.6%
Compare
Margin
from 2Q2009
Computer
Services
40%
Financial
Industrial
Services
39.5
16%
Financial Total Country GP Normalized
General
Other
Industrial Public
Services
Bus.
62.9%
43.7%
--
37.4% 1% 96.7% 5% 26.9% 9%
39.3%
FY2007 96.5%
FY2008 28.3%
1Q2009
20%
Risk Multiples
2.62 %
46%
-- Partner Revenue
% Business
50.3%
3.4 pts
14%
50.0%
1.5 pts
33%
ComputerSoftware Services
Hardware
Comm
Dist
Services
43.0%
90.1%
32.9%
40%
196%
0
(5) Revenue
102
%(3)
Business Partner
(18.08)%
%
66.6269%
% (33.82)%
% (32.20)% (2.39)%
9% 31.3612%
10% 30.56100%
14% 72.07 %
#DIV/0!
#DIV/0!
25%
-20%
0%
174%
174%
-657%
28%
19%
41%
12%
100%
33%
41.5
41.9
38.3
36.9
39.1
36.3
36.3
39.1
14%
22%
54%
10%
100%
16%
-10%
-48%
-125%
-666%
-27%
25%
28%
-66%
Hardware Software Services
Other
Total Country GP Normalized
Delta
3.4 pts
1.5 pts
390.6
-24.1%
% Change
from 2Q2009
40% Short-Term Signings
2Q2010
792.0
-13.7%
Long-Term Signings
2Q2010
% Change
from 2Q2009
390.6
-24.1%
© 2010 IBM Corporation
IBM country risk score structure
Tier 1
Data
updated
monthly;
scores
calculated
automatically;
analytics flag
level of risk
Tier 2
IBM
Country
Risk Score
Avg. of Tier 2
risk scores
Economic Indicator
Shareholder Value
Liquidity factors
Risk-reward
Derived from
avg. of Tier 3
Sub-scores
Predictive
Score
(next 3
months)
Tier 3
Key risk metrics
(e.g. Foreign Reserves, GDP,
Raw data
translated into
sub-scores
inflation, Cash balance, GP margin)
25
© 2010 IBM Corporation
Macro Economic Report - Scorecard quadrant example
External indicators provide trends on the business environment.
26
© 2010 IBM Corporation
Thank you
Ludek Rainet
[email protected]
27
© 2010 IBM Corporation