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February 21, 1988

UNISYS CORP SEES $20,000m TURNOVER, $3,000m FROM ACQUISITION, BY 1991

By CBR Staff Writer

Unisys Corp should be a $20,000m a year company by 1990 or 1991, chairman Michael Blumenthal told analysts in New York last week. The target would represent a more than doubling over three or four years, because the company’s turnover in 1987 was $9,700m and the company will have to start motoring in 1989 to make the target, because Blumenthal is forecasting only single-digit turnover growth for 1988, implying that the outturn will not be more than about $10,800m. Thereafter he looks for annual growth of 10% to 12% excluding acquisitions, taking internally-generated business to between $15,000m and $17,000m by 1991, and acquisitions should make the total up to the $20,000m mark. What acquisitions? Well despite gossip that a move for NCR Corp was on the cards, Blumenthal says that his primary target is to expand the Unisys Networks business structured around the Timeplex Inc acquisition to some $1,000m a year from the present $600m, and to expand and extend the company’s business in the field of computer and telecommunications convergence. On the profits front, Blumenthal looks for double-digit growth this year on the $578m the company achieved in 1987, and he hopes to hit the target of 15% return on equity this year, up from 13.8% in 1987. He also looks for an 11% pre-tax return on sales, up from just under 10% last year. The forecasts all assume 2% to 2.5% growth in US gross national product this year, and average interest rates of about 9%. Selling, general and administrative expenses should not exceed teh 24.2% of sales recorded in 1987, and interest charges will fall slightly to between $220m and $225m. Capital spending will be a little below the $450m of 1987, and the tax rate should be two or three percentage points down on the 39% for 1987. On the products front, Blumenthal looks for high single digit growth from mainframes, but double digit growth from departmental machines, workstations, software and services. On the Unix front, the business should grow by 50% to $450m this year.

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